Coleman can be Frank about personal benefit

The word of the week is "bonds" performance bonds and labour and material payment bonds.

If however we really want to know if Frank Coleman benefited directly from the government's cancelling of the contract we need to see the indemnification agreements.

Here's as simple as I can put it: In order to bid on contracts the company/contractor needs to supply a performance bond. This bond simply is to protect - in this case government - from default of or problems with completing the agreed to work under contract. In order for the company Humber Valley Paving to get a bond they must go to a surety company. The surety company then requires that indemnification agreements are signed by the principal (bidder) and possibly others - typically majority owners, their spouses, and in some cases assets of other companies owned by a majority owner.

We have not talked much about the indemnity agreement - rather we have focused on the bond. This is exactly what government and Minister McGrath would prefer and here's why. Just because Frank Coleman sold or transferred for a nominal fee his majority shares to other shareholders does not necessarily relinquish his obligations under an indemnification agreement. So in other words - Coleman may claim he can no longer speak for the company as he no longer holds shares but what Coleman is not saying is that he still may have been on the hook for losses should the bond have been called.

Now let's look at how Coleman may have directly benefited. The government says that the contract was not cancelled until after Frank Coleman relinquished his shares. While that part may be true - if the bond was called after Coleman divested of his interest in HVP - Frank Coleman still may have been an indemnifier for any losses resulting from the bond being called. This could be millions of dollars.

This is why this whole thing smells rotten - because ALL information is not forthcoming and they hide behind things like "I am no longer a shareholder" therefore cannot speak for the company. Okay then here are the questions for Frank Coleman.

1. Did you personally or any of your holdings other than HVP indemnify the surety for the performance bond?

2. Have you sold or divested of your other interests such as Coleman Foods - if not why not?

3. When an extension was sought by HVP - did you provide a letter from the surety regarding that extension. Were the appropriate emails, faxes, documents, provided to the surety?

Bottom line is this - unless we see the indemnification agreement for the bond - we cannot ascertain if Frank Coleman benefited from the government's decision to cancel the contract and not call the bond.

Further any indemnity agreements signed by Frank Coleman personally or by other entities where Frank Coleman has interests are really personal documents not documents of HVP. Our future Premier should have no problem releasing these. 

None of this of course negates the fact that relatives of Frank Coleman benefitted.