Last updated: 10:45 AM ET, Thu July 30 2015

Bankruptcy Court Approves Baha Mar Interim Financing

Hotel & Resort | Brian Major | July 01, 2015

Bankruptcy Court Approves Baha Mar Interim Financing

The U.S. Bankruptcy Court on Wednesday approved continued payments to employees, suppliers and vendors, and the operation of “certain customer loyalty and other programs,” on behalf of Baha Mar, the $3.5 billion mega-resort whose developers filed for Chapter 11 bankruptcy protection Monday.

Late Wednesday, the bankruptcy court approved interim debtor-in-possession financing arranged by Sarkis Izmirlian, Baha Mar Ltd.’s chairman. Up to $30 million of the funding will be utilized by Baha Mar over the next 30 days; the total facility totals up to $80 million.

The $3.5 billion mega-resort’s developers filed for Chapter 11 on Monday, charging that general contractor China Construction America missed deadlines leading to delay costs and repeated postponements of the mega-resort’s originally scheduled December 2014 opening.

Baha Mar officials also canceled all existing guest reservations at the mega-resort’s anchor property, the Baha Mar Hotel & Casino, and have stopped taking new bookings.

The developers are advising travelers with reservations at the three other resort properties under construction – the Grand Hyatt and the Rosewood and SLS hotels - to contact their respective hotels directly. The mega-resort’s sole open property, the Meliá Nassau Beach, is operating normally.

U.S. tour operators are adjusting their strategies in the wake of the Chapter 11 filing. “With the Chapter 11 bankruptcy filing, Pleasant Holidays has suspended sales of the Baha Mar hotels until we get clarity on the opening date of the resort,” said Jack E. Richards, the firm’s president and CEO.

“The preliminary information in the bankruptcy papers indicates the resort is about 97 percent complete so we are hopeful the resort will be open sometime in 2015,” Richards added.

Baha Mar officials have also launched a website designed to update stakeholders on the progress and reasons behind the project’s Chapter 11 filing. In addition to news related to the Chapter 11 and court filings, the site includes sections for guests, Baha Mar staff and Bahamas citizens, vendors and suppliers and “community.”

The site directs project vendors and suppliers to file “proof of claims for any amounts owed prior to the commencement of the Chapter 11.” Baha Mar has engaged a claims agent to assist the vendors and suppliers in the claims process.

Said Izmirlian, “Our goal is to complete construction and successfully open Baha Mar as a world-class destination resort that will attract guests from across the globe and serve as a key economic sparkplug in the Bahamas.”

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