Wind-up of country’s first stem cell therapy provider being challenged
NASSAU, BAHAMAS – The fate of Freeport’s pioneering stem cell therapy provider has now become the subject of legal dispute, with its principal creditor seeking the winding-up of the company.
According to court documents seen by Eyewitness News, Okyanos claims that damages suffered to its nearly 15,000 sq feet rented Freeport facilities as a result of Hurricane Dorian in September 2019 left the premises ‘unfit for use’. As a consequence, all of the company’s business ceased. That claim however has been fiercely disputed by its landlord First Commercial Ltd who is seeking to have its dispute arbitrated and block the removal of the company’s equipment which could satisfy an award in those proceedings.
Okyanos is the first licensed stem cell therapy provider in The Bahamas. It has been treating patients with chronic diseases by using their own stem cells from fat tissue. It opened to patients in October 2014, providing treatment for those with autoimmune, orthopaedic, cardiovascular and neurological conditions.
According to details outlined in a wind-up petition by its primary creditor LS Enterprise Ltd, -a company registered in the British Virgin Islands, Okyanos between August 2, 2017 and May 6 2019 entered into four loan facility agreements for working capital and general corporate amounting to some $15.9 million. Okyanos had ultimately sought additional loans from LS Enterprise Ltd following Hurricane Dorian however was informed that it was in default of its facility agreements having ceased to carry on its business and that all loans were immediately due and payable.
According to the wind-up petition an ‘ex parte’ order obtained by Okyanos’s landlord First Commercial Ltd had restrained the stem cell therapy provider from remediating the premises or removing its equipment. It is claimed that substantial amounts of water and wind had penetrated the company’s premises causing major property loss and damage. Further, a lack of consistent electricity and air conditioning had caused mold contamination.
“The company attempted to mitigate loss and damage by moving equipment to a climate controlled storage and and preparing the company’s operating facilities for mold remediation but that was hampered by the landlord whose servants or agents instructed the company’s personnel to cease and deist from such activities,” LS Enterprise outlined in its petition.
It further noted that in a notice to the landlord dated October 25, 2019, Okyanos had exercised its right to terminate its lease agreement within 60 days following the storm due to the facilities being unfit for use or occupancy the hurricane. On October 30, First Commercial Ltd obtained an ex parte order restraining the company from any further remediation efforts as well as the removal or disposal of equipment, LS Enterprise has claimed. The company had filed for damages with its insurance provider but had not received the majority of any such insurance proceeds the petition station.
Accordingly it is claimed that the company has insufficient funds to secure a new lease for facilities to treat patients, arbitrate with landlord to recover its equipment and supplies, or conduct a marketing campaign to attract patients to The Bahamas.
However, an affidavit but attorney Andre Jay Feldman, president and a member of the Board of Directors of First Commercial Centre seeking to restrain Okyanos from breaching its lease disputed the company’s damages claim.
According to Mr Feldman’s affidavit, a copy of which was seen by Eyewitness News, he inspected the premises on September 4 and beyond some minimal damage due to a single window having opened in one of the clinical rooms, there was no damage whatsoever throughout the clinic and ‘no significant damage’ referred to by the company. Mr Feldman claimed that Steve Araiza, a Houston based attorney for Okyanos had written him on September 26, 2019 seeking a rent abatement and to end the lease on the grounds of hurricane damage.
According to Mr Feldman, flood water had entered parts of the ground floor occupied by CIBC and on September 15, 2019, the bank had not only remediated any damage but had reopened for business. He further contended that on September 4, Okyanos had allowed the Rand Memorial Hospital to use its facilities for urgent patient care. Mr Feldman contends that there was no damage to make the facilities unfit for use. According to Mr Feldman, since September 1 there had been no payment towards rent or electricity with respect to air-conditioning consumption. He asserted that if Okyanos is allowed to remove its assets they would be shipped out of country and would not be available to satisfy any award from arbitration. The landlord is claiming it is owed $1,768,000 and that while it plans to claim on a $890,000 loss of rent insurance there is no guarantee that can be recovered.
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