Damien King, chairman of Dyoll Group. - File

The lawsuit against Dyoll Group brought by liquidators of its insurance arm won't be heard until May 8.

But instead of defending a $117-million suit, Dyoll Group will be asked to make restitution of $388 million. Legal sources tell the Financial Gleaner that Dyoll Insurance in liquidation alleges overcharged management fees by its former parent.

The revised claim was filed this week and should have been served on Dyoll Group, Debbie-Ann Gordon, attorney-at-law for Dyoll Insurance liquidator John Lee, told the Financial Gleaner on Thursday.

Press ahead with vote

Days before, Dyoll Group chairman, Dr Damien King, had signalled that the failing company will press ahead with the holding of a vote on a resolution to dissolve the business even before the lawsuit is heard.

"At this point the impending lawsuit is one of the challenges we are being faced with, but we are trying to find a way not to allow the case to hold up the shareholders value," King told the Financial Gleaner.

The special shareholders meeting is to be held by April 25, at least two weeks ahead of the court hearing of the suit brought by joint liquidators, Jamaica's John Lee and Cayman's Ken Krys, in Jamaica's Supreme Court.

The suit, which was initially filed last year, had derailed Dyoll Group's earlier timetable of September 26 to hold the vote on the winding up of the business.

The company needs shareholder approval to petition the Supreme Court to appoint a liquidator.

Dyoll Group was, at last report, $82 million in the red, but said it had call on a judgement debt of US$3 million (J$210 million) against Drax Hall Limited.

Initially, King, though confident of a successful defence against the suit, had said the judgement debt would have been sufficient to cover the award if the court ruled against it.

But the initial claim of $117 million has now tripled to $388 million to 'more accurately reflect' the amount of fees allegedly overcharged, "The modest sum of approximately $117 million was arrived at by the liquidators after making several assumptions in Dyoll Group's favour, all with a view to effecting an out-of-court settlement," Gordon had said from February 8.

"As this is a matter pending before the court, we are not at liberty to disclose any further information, but should Dyoll Group so pursue, Dyoll will take all legal steps to ensure that its claims against Dyoll Group are not prejudiced."

She reiterated the sentiment in an interview this week.

'Injunctive remedy'

If Dyoll Group shareholders vote to wind up the company, said Gordon, liquidators of the insurance subsidiary have the option of seeking 'injunctive remedy' in the court.

Meantime, a third interim dividend payment to clear another 13 per cent of 13 per cent is to be made to creditors of Dyoll Insurance Company by Lee and Krys, commencing April and continuing for a period of six months.

Dyoll Insurance has just under $2.8 billion in liabilities to clear, with Jamaican creditors owed about $760 million and Caymanians, $2 billion.

The third dividend payment will decrease the total debt outstanding to approximately 52 per cent, the liquidators having paid two interim dividends of 12 and 27 per cent in May and September of 2007.

Lee said no timetable has been set for the next payment, but he told the Financial Gleaner that distributions would continue as funds become available if the lawsuit is decided in Dyoll Insurance's favour.

To date only about 60 per cent of the creditors have come forward.

- Sabrina N. Gordon