Liberia: Commercial Court Yet to Hear MOTC’s Bankruptcy Petition

About eight months after the Monrovia Oil Trading Company (MOTC) filed a petition to the Commercial Court to declare bankruptcy, the court is yet to decide whether to consider the matter.

The MOTC petition for Insolvency (bankruptcy) was filed on August 31, 2021, just about five months after the JIC released its investigative findings that implicated both the Chief Judge of the Commercial Court, Eva Mappy Morgan in the alleged unauthorized withdrawal of US$3.3 million, from the escrow account for Ducor Petroleum Incorporated, that was housed at the Liberia Bank for Development and Investment (LBDI).

The petition argued that the company had no means of meeting its obligation to many of its creditors, and so the court should declare them bankrupt. They claim that the company's bankruptcy was discovered when Crowe Liberia LLC, on December 31, 2020, conducted an audit of its financial statements.

“Our total liabilities are higher than the total assets and the operating income, which makes it impossible for us to run the day-to-day business. We cannot also pay our creditors,” the lawsuit further alleges,” the petition said.

However, since the bankruptcy petition was filed, Morgan is yet to make a ruling on the matter. 

If the MOTC’s petition is granted by the Commercial Court, then Brosius would be barred from filing any lawsuit against the MOTC, even if the Supreme Court were to affirm the JIC's recommendation. It is not clear why the oil company has decided to file for bankruptcy when the justices of the Supreme Court are still debating the JIC's recommendation, which calls for a period of one-year suspension without pay and benefits for Morgan as a result of an “ethical breach.”

The Court tabled the JIC recommendation based on an appeal filed by Morgan. The JIC is an arm of the Supreme Court that is responsible for investigating ethical violations of magistrates and judges.

However,  Chief Justice Korkpor has communicated with President George Weah to appoint an Ad-hoc Justice to conclude the matter. His decision was due to the recusal of Associate Justice Yussif Kaba, one of the five justices on the bench and who chaired the commission that held Morga liable. 

The JIC recommendation was prompted by a complaint filed by a Liberian businessman, Amos Brosius, and then the general manager of Ducor Petroleum Incorporated.

The case derived from a lawsuit for accounting filed by MOTC against Brosius, in 2013, accusing him of misapplying several million dollars worth of petroleum products supplied to Ducor Petroleum. Morgan, as chief judge of the Commercial Court, reached an agreement with the parties, MOTC and Brosius, to freeze the Ducor's escrow account, housed at the Liberia Bank for Development and Investment (LBDI), pending the outcome of the lawsuit.

Based on the agreement of the parties, Morgan ordered a freeze on Ducor Petroleum's accounts at LBDI and Ecobank Liberia limited. However, the JIC said, upon request by MOTC lawyer, Cllr. Negbalee Warner, the account was unfrozen, leading to the usage of the fund.

Warner claimed that his letter was to aid the smooth operation of the company.

“The investigation found and established that Judge Morgan proceeded to unfreeze and subsequently returned the Ducor Petroleum’s account, domiciled at LBDI, on the request of MOTC dated July 24, 2013, without notice to Brosius or his lawyers. The freezing of the account in question, being a result of an agreement, the judge ought not to have ordered ex-parte, the unfreezing,” the JIC investigation finds.

The JIC Investigation established that Morgan's actions to unfreeze the account and to return its status quo, “without the agreement of Brosius, violates the judicial cannon.”