Baha Mar Receives Court Adjournment To Continue Negotiations
Baha Mar Ltd. on Tuesday received an adjournment until July 20 of its scheduled hearing before the Bahamas Supreme Court. Baha Mar officials had sought to have the Bahamas court recognize last week’s Chapter 11 bankruptcy filing in the United States.
In what may prove a light at the end of the dark tunnel that has engulfed the $3.5 billion project, now seven months behind schedule, Baha Mar officials called for the adjournment “to enter into negotiations with China Export-Import Bank and the Bahamas government,” according to a statement. Officials at China Construction America Bahamas (CCA Bahamas), the project’s chief contractor, will also be party to negotiations, the statement adds.
“Baha Mar’s singular focus is to do all it realistically can to enable Baha Mar to be completed and opened successfully as soon as practicable,” officials said in a statement. “We look forward to engaging in substantive discussions with the parties to try and reach a consensual resolution that will allow us to move forward, and acknowledge the government's constructive role in those conversations.”
The adjournment follows statements issued earlier Tuesday by CCA Bahamas officials that accuse Baha Mar Ltd. of “mismanagement” and “failure to secure adequate financing” that led to crippling delays and ultimately the development’s bankruptcy.
“Baha Mar Ltd.’s decision to file for bankruptcy protection is the direct result of its failure to secure adequate financing and its mismanagement of the design of the Baha Mar resort project,” said the CCA Bahamas statement.
“[Baha Mar Ltd.’s] mismanagement includes replacing the principal architect after construction commenced, the late and incomplete delivery of design packages and over 1,300 construction change directives,” the statement reads.
Simply put, CCA Bahamas officials say they haven’t been adequately paid for their work. “Since February 2015, CCA Bahamas and our subcontractors have performed nearly $72 million of contract work for which we have received no payment,” the statement reads.
“Our aggregate investment in and commitment to the project, including money advanced by [CCA Bahamas parent] CSCEC on behalf of the developer, approximates $220 million,” the statement adds. “We have continually acted in good faith in the performance of this work reliant upon the belief that Baha Mar Ltd. would fulfill its responsibilities as the owner.”
The CCA Bahamas statement also calls Baha Mar Ltd.’s decision to file for bankruptcy in a U.S. court a “misplaced and calculated” strategy designed to “benefit the project’s developer over the interests of the Bahamas and its people.”
“The vast majority of the Baha Mar debtors are organized under the laws of the Bahamas,” says the CCA statement. “The Baha Mar project is located in the Bahamas, and the Bahamian people are deeply invested in the future of the project. Baha Mar Ltd.’s decision to file for bankruptcy protection in the United States was, therefore, misplaced and calculated to benefit the project’s developer over the interests of the Bahamas and its people.”
Allyson Maynard-Gibson, the country’s attorney general, also expressed concern last week regarding Baha Mar’s decision to file for bankruptcy in the U.S. She said Baha Mar Ltd. chairman Sarkis Izmirlian’s move to “circumvent” Bahamas courts by filing for Chapter 11 in the U.S. would lead to “serious and far-reaching implications” in the Bahamas.
Baha Mar responded to the CCA’s comments Tuesday in a statement. "Our Chapter 11 filings and litigation against defendant China State Construction Engineering Corporation, the parent of CCA, all speak to the failed construction performance of the general contractor and the resulting disturbing consequences,” the statement reads.
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