$883,520 remains with GOB–Bellas

The Garment Oversight Board, which is closing tomorrow, still has in its possession $883,520.11 in class lawsuit settlement funds.

In an interim accounting report filed Tuesday at the U.S. District Court, GOB chair Timothy H. Bellas disclosed that, as of September 2008, the board still has $777,495.94 in undistributed residual settlement funds.

The GOB, according to Bellas, has $86,930.17 in operational funds in its investment account with Bank of Hawaii, to which an additional $19,094 was wire transferred by claims administrator Gilardi & Co. on Oct. 10, 2008, for a total of approximately $106,024.17.

“The total is approximate because there may be interest added once the October statement is received from the Bank of Hawaii,” he said.

Therefore, the former judge said, the grand total of funds in GOB’s possession is $883,520.11.

He said the only known and significant outstanding liability that the GOB has is a payment for auditing services being currently rendered by J. Scott Magliari & Co. The total amount to be paid for such services will be in the vicinity of $5,000, Bellas said.

In the distribution of the residual settlement funds, the chairman said the total number of checks GOB had mailed out to class members (former and current garment workers) is 13,676, but only 8,152 of those checks were cashed as of Sept. 30, 2008.

Bellas said each check was worth $145 so the total amount of residual settlement funds disbursed is $1,182,040.

He said there are 1,233 checks that were returned to GOB as undeliverable, for a total amount of $178,785.

Bellas said there are 4,291 checks that were not returned and not yet cashed, for a total of $622,195.

“Assuming that an additional $50,000 of the outstanding checks are cashed between now and Dec. 31, 2008, the closing balance of all funds remaining in the GOB’s accounts will be approximately $830,000,” he said.

Bellas proposed to the court that, while the GOB’s existence will end Friday, there should be “caretaker operations” as its checking account will not be closed until Dec. 31, 2008.

He explained that in an effort to get as much of the residual settlement funds to the workers, GOB continued to reissue any checks that had been returned via mail because of some problems.

As a result, he said, as recently as mid-October 2008, GOB still reissued checks to class members.

“A certain amount of time will be needed for these replacement checks to be negotiated by the class members and for them to appear on the GOB checking account statement,” Bellas said.

Therefore, he said, the current accounting will not be complete until after the GOB ceases operations on Oct. 31, 2008, and thereafter receives its monthly checking account statements.

“It would be in the workers’ best interests to maintain the GOB checking account open for an additional 30 to 60 days in order to allow all of the reissued checks to clear the account,” the chairman said.

During the interim period of Oct. 31, 2008 to Dec. 31, 2008, he said no new financial transactions will be entertained, with the exception of payment of necessary expenses or any obligations that were incurred prior to Oct. 31, 2008.

Upon closing the account on Dec. 31, 2008, Bellas said, all checks not cashed by that time shall be void or voided and he shall be authorized to transfer the balance of the checking account to a new Garment Worker Trust Fund account.

He will then file a final accounting advising the court and all interested parties of the final amount that is deposited into the Trust Fund by Jan. 31, 2009.

Upon the expiration of the Trust Fund, the trustees would solicit proposals from non-profit charitable organizations in the community, with the court’s approval, Bellas said.

He said the trustees will then donate the remaining money to the chosen organization.

GOB was set up pursuant to the $20-million settlement agreement in the class action against CNMI’s garment industry. Its purpose was to oversee the monitoring program of the garment industry.

Before the remaining settlement money was transferred to GOB last year, a company (Gilardi) that was tasked to distribute the funds to some current and former garment workers informed the federal court that it successfully mailed out almost 29,800 checks to individuals located in 17 countries.

The company said the total cash distribution represented by the checks is $2.3 million out of an initial net fund of $4 million.