(CMR) The Grand Court has issued a winding up order for Safeguard Security Services Limited, a company managed by The Security Centre Limited (TSCL), after founder Adrien Briggs accused TSLC of mismanagement of the 28-year-old business.
Mr. Briggs filed a petition for the company to be wound down, stating that TSCL, which was appointed originally to provide management services, has wrongly appropriated the business and goodwill of the Company.
According to court documents, Mr. Briggs believes TSCL wrongly acted in competition with the Company in breach of the Shareholders' Agreement and contrary to the understandings between both parties. TSCL was also accused of making the Company pay CI$140,000 so that the losses suffered by TSCL from the misappropriation of funds by an employee would be reduced, albeit at the expense of the Company. Allegations are that about June 2013, the employee of TSCL had misappropriated nearly C$ l,000,000 from and belonging to TSCL.
TSCL has agreed for Safeguard Security Services Limited to go into liquidation, although not admitting to the allegations. Initially, TSCL did not accept that the Company should be wound up and instead submitted that the Court should exercise its discretion under section 95(3)(d) of the Companies Act (as revised) to make an order that one member shall purchase the other member's shares in the Company.
However, TSCL, through their attorneys HSM Chambers, wrote to Mr. Briggs, via his attorney, Nelsons, in May 2022, accepting that “no useful purpose would be served in keeping the Company in operation (to the extent that it has any operations at all) ” and confirming that TSCL “will not object to the winding up of the Company and placing it in liquidation.”
HSM proposed, on behalf of TSCL, that the members pass a special resolution requiring the Company to be wound up in accordance with section 92(a) of the Companies Act (2022 Revision) and appoint joint official liquidators from Kalo to act in the matter.
Mr. Briggs agreed with this course of action, and on or around 20 June 2022, a resolution was signed by both members of the Company resolving to place the Company into a Court supervised liquidation following section 92(a) of the Companies Act (2022 Revision) and to appoint Elizabeth Galbraith Mackay and Paula Jane Richmond of Kalo as joint official liquidators.
TSCL and the Company entered into a Memorandum of Understanding in 2005 with the intention that they would both pool their respective traditional guarding businesses, and the pooled business would be carried out by a new company, Safeguard Security Limited.
Under the MoU, TSCL was allocated 60% of the shares in the new company, and the Company would
hold the remaining 40%. Each shareholder in the new company was to give the other shareholder the right of first refusal to purchase any shares it may wish to sell, such shares to be valued on the basis of 5 times the average annual profit over the previous 36 months.