Ken Tomlinson has quit as liquidator for KES Development Limited, less than a year into the appointment, fearing that his firm, according to informed sources, would find itself too exposed to the real estate development company's billion-dollar debts.

Tomlinson, who runs Business Recovery Services Limited, is already facing at least two lawsuits, including one from one of Jamaica's most powerful companies, bent on recovering debt owed by KES.

Resignation

Tomlinson's resignation took effect last week Tuesday, after his company's board determined that Business Recovery was not properly indemnified against the incoming claims.

Hugh Scott, the founder and executive chairman of KES Development Limited, who placed the company in voluntary liquidation in late 2008, says he is in the process of finding another liquidator.

"We are having discussions with other people," he said.

Appointing a liquidator

But Scott also noted that it was likely that creditors, of which there are at least 35, could, through the courts, appoint a liquidator to wind up the company.

On Tuesday, Jamaica Mortgage Bank, one of two secured creditors, said while it could exercise the debenture that it holds, it was considering another strategy - going after the personal holdings of Scott and his wife Elsa, who was his partner in the business.

"In terms of the company, we don't think there is value there," JMB General Manager Patrick Thelwell told Wednesday Business.

"We also have a personal guarantee and that is what we are looking at right now ... . We have looked at the company, we don't see anything there and we are looking at the persons to see if we need to move on the personal guarantee," he said.

Thelwell declined to say when the bank would be making that move.

"We are examining all the options," he said. "We have done a lot of work on it. I just can't say anything definitive (yet)."

State-owned JMB, according to KES documents, was owed $143.45 million and Capital and Credit Merchant Bank (CCMB), the other secured creditor, was owed $253.29 million.

CCMB's lawyer was said to be in court and not immediately available to comment on Tomlinson's resignation.

Receivership

As debenture holder, JMB could have opted to put the company in receivership, but Thelwell said the bank did not want to take on the responsibility such a move implied.

"If you put the company in receivership, you basically take over the responsibility for the operation of the company and you are responsible to everybody," he said. "It would not be beneficial to us."

Scott had placed the business in liquidation last December after its cash had virtually dried up with its projects unfinished.

The largest portion of KES' debt was $480.5 million in deposits for houses that are yet to be delivered.

dionne.rose@gleanerjm.com