The folding of White’s supermarkets left $1.8 million being owed to Pitt & Co, BGA and Magazine Distributors, evidence presented in Commercial Court yesterday revealed.

In the case of Pitt & Co Ltd et al v Gary White et al, which involves brothers Gary White and Michael White against Pitt & Co and the BGA Group of Companies, arguments revolved around the issue of disclosure.

Under cross-examination during the first day of the case, Pitt & Company Ltd and BGA Wholesale Distributor’s president and chief executive officer John Tomlinson told the Puisne Judge Stephen Hellman that when doing business in Bermuda “legal minutiae do not play much of a role”.

While the White brothers had only formally guaranteed the debts of one company, White and Sons Ltd, the plaintiffs allege they were also liable for the debts of White’s at Southside Ltd and White’s at Hayward’s Ltd.

The wholesaler’s CEO said it was his long held belief that the three grocery stores, White & Sons, White’s Southside supermarket and Haywards Supermarket, were all held by the same limited liability company. In fact, the three grocery stores were each independently held by separate limited liability companies.

The court also heard that Mr Tomlinson, a former British army officer, was negotiating to buy the supermarkets while holding the impression they were held by a single company.

Mr Tomlinson said: “I’m very experienced in handling successful businesses,” and added: “My background is not one of a technical business nature.”

It was not until a writ for the money owed was served that it was pointed out that by the Whites’ attorney that the three supermarkets were not held as a group, but each as an independent entity.

Mr Tomlinson, explaining it was his understanding that it was a single company that ran the three supermarkets, compared the supermarkets with the Phoenix Group. He explained the BGA’s biggest customer is the Phoenix Stores which operates six pharmacies and other retail outlets.

“We have trading relationships with each of the these companies on an independent and unique basis,” he said. “There is, however, only one limited liability company and that is Phoenix Stores Ltd.”

Discovering that the three supermarkets were independent of one another “ ... was a complete shock and surprise to me — that the three supermarkets could be presented as independently operating companies”, he said.

However, Saul Froomkin QC, acting for Gary White et al, put to Mr Tomlinson that he had been aware as early as 2003 that South Side Supermarket was a limited liability company. “I absolutely disagree with you,” responded Mr Tomlinson.

Mr Froomkin presented several cheques as evidence to show that the White’s at Southside was described as White’s at Southside Ltd, and that Hayward’s supermarket was also described as Hayward’s Ltd, dated prior to the serving of the writ.

Mr Froomkin said of a total of 34 cheques he presented in evidence which were payable to either BGA or Pitt & Company, dated from November 2009 to July 2011 - “ ... every single one of them had printed on them ‘corporate account’.”

Mr Froomkin added: “Documents not disclosed by your attorney have been brought to my attention the other day — an e-mail from you — dated 23 January 2012, to Mr (Kim) White.” He said the email included the phrase: “We agree to purchase the three operating companies ...”

Mr Froomkin asked Mr Tomlinson: “You didn’t know until June 2012 there were three companies?”

Mr Tomlinson answered: “Yes.”

Mr Froomkin continued: “You were taking about a purchase of three companies with millions of dollars. I suggest, and you are saying you weren’t paying attention — you were negotiating to purchase with millions of dollars?”

Mr Tomlinson responded: “It was not in my remit — we have a financial comptroller. My remit is to determine if we had a business interest.”

Mr Tomlinson said that determining the corporate make-up of the customers they did business with “was not something I would attend to with any minutiae.

“I think it reflects the environment in which business is operated in Bermuda — that is trust and dealing with integrity.

“Legal minutiae do not play much of a role.”

He continued: “We can operate on a handshake. Our word is our bond in the market. The mechanics of doing business in Bermuda is one of trust and expectations.” He added: “For when you’re dealing in the business environment, it makes no difference to us if a company is limited or not.

“We’re not hugely influenced by the status of a company — what matters in Bermuda is honesty, integrity and commitment to the truth.”