A HIGH COURT judge has dismissed a claim by a San Juan security firm which alleged it was owed $.25 million by Stone Street Capital Ltd, an investment firm owned by a former PNM treasurer and Clico Investment Bank chairman Andre Louis Monteil, as the outstanding balance on a loan.
On Tuesday, Justice Ricky Rahim dismissed the breach of contract lawsuit of The Chosen One Security Services, as Monteil’s Stone Street Capital successfully proved the sum being claimed was an investment in a bar.
“It is obvious to the court that having invested the sum of $250,000 into the bar business, the claimant has tried to recover the funds as a loan, the business having closed in 2016.”
The security firm alleged its director Joel Thomas loaned Monteil $450,000 back in 2014. His claim said Stone Street repaid $200,000 but refused to pay the outstanding balance.
Thomas maintained he never invested in the bar, 22 Sports Bar at 141 Long Circular Road, Maraval.
Stone Street’s defence was that Thomas agreed to $250,000 in its subsidiary Fox and Hound Acquisition Corporation (FHA), which traded as 22 Sports Bar.
Since FHA did not have a bank account when Thomas wrote the $250,000 cheque, it was made out to Monteil, and when deposited, shares were issued in FHA to The Chosen One.
The company said 22 Sports Bar, which opened in February 2016, was the only business carried on by FHA and was forced to close on October 31, 2017.
In evidence, Monteil said he told Thomas about the plan to open the bar and they spoke of the investment opportunity for those who provided start-up capital for the venture.
He said Thomas decided to invest, along with several others, who included two attorneys and several businessmen.
In his ruling, Rahim said this was “one of those rare cases in which both explanations of the nature of the transaction are at first blush plausible.”
He said there was no written agreement either for a loan or for an investment. However, he said Stone Street produced public documents to support its case, in particular, the company’s annual return for the year ending February 2015, filed with the Companies Registry, which showed who FHA’s shareholders were. The Chosen One was listed as one of seven.
Rahim also said from the evidence it was clear FHA was raising capital to start the bar and others were investing in the venture.
“It must be emphasised that this return was filed as way back as 2015 when it was required to be filed in law and is not a filing made long after in an attempt to create a case on the part of the defendant...
“The effect of the annual return is to totally destroy the claimant’s case in the court’s view as it demonstrates clearly that the defendant is not fabricating a defence.”
By the date of filing in 2015, 1,875,000 shares had been issued, and by 2016 that number had increased to 3,550,000.
Rahim was critical of Stone Street Capital for not responding to The Chosen One’s pre-action letter in 2018, saying had it done so, the case would not have reached the court.
Rahim also sai
