Last updated: 10:38 AM ET, Thu July 30 2015

Baha Mar Developers Opt For Silence Following 'Dirty Tricks' Charge

Hotel & Resort | Brian Major | July 13, 2015

Baha Mar Developers Opt For Silence Following 'Dirty Tricks' Charge

Photo courtesy of Baha Mar

Baha Mar officials pledged Monday to refrain from further public statements as negotiations continue toward reaching a settlement of the impasse that has kept the $3.5 billion mega-resort from opening. The pledge follows Baha Mar Ltd.’s accusations late last week that China Construction (CCA), the resort’s chief contractor, had stolen key construction documents.

“Baha Mar plans not to make any public statements on the discussions as they occur and, if at all, until they are concluded,” said officials in a statement. “We would hope all those attending conduct themselves in a similar fashion so that the private parties have the most conducive environment in which to undertake this effort.”

Late last week Baha Mar Ltd. officials filed a motion in U.S. bankruptcy court in Delaware seeking to secure “key project-related documents" to which the Baha Mar developers “are entitled under the operative agreements” but which they said CCA and “certain of its executives have in their possession and are refusing to hand over or cooperate in verifying that they have preserved.”

Baha Mar officials need the documents to craft a timeline to ultimately open the mega-resort and welcome guests. The developers say their inability to access the construction documents also puts them at a disadvantage in ongoing negotiations following Baha Mar’s Chapter 11 filing earlier this month.  

“The Debtors are at a palpable disadvantage in continuing negotiations among the existing parties unless and until they are in possession of accurate and complete copies of all project documents,” the motion states. The developers also need the documents in case they opt to hire another contractor to complete the project, the motion adds.

Baha Mar went on to charge that CCA, China’s state-owned contractor, attempted to steal the documents. 

“Baha Mar limited access to its premises, including the project offices from which the construction was being directed by CCA,” for approximately 10 days following Chapter 11 filing “to try to safeguard the integrity of the materials therein.”  

However, “CCA and/or its affiliates, through their agents and employees, have attempted to sneak past Baha Mar security personnel into Baha Mar project offices and remove documents from the premises,” the motion says.

 “Many of these attempts were coordinated, and some were accompanied by acts of vandalism and extortionist demands, including a CCA-initiated deliberate sabotage of the main power source for the project.”

The motion adds, “Given the scale and ongoing nature of the efforts to remove documents from the project premises it is highly unlikely [Baha Mar] will be able to capture a full record of project documents absent appropriate discovery from CCA entities, affiliates and service providers.”

CCA officials have denied the accusations, terming Baha Mar’s allegations as “false and misleading” and “an effort to deflect attention away from its mismanagement” in a statement.

“The fact of the matter remains that CCA is committed to working in partnership with the Bahamian government in order to reach a resolution and complete this important project for the people and economy of the Bahamas,” the statement added.

Monday’s Baha Mar statement can be viewed as a sign the sides are attempting to put aside their rhetoric in an attempt to forge a resolution as the project nears seven months beyond the original opening date.

“It is clear that we recognize the importance of completing construction and successfully opening Baha Mar as soon as possible,” said Monday’s statement. “We appreciate the government's efforts to achieve a consensual resolution in a timely manner. We have an urgency to reach an appropriate resolution, and look forward to participating in discussions this week in China.”

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