Baha Mar ‘is entitled to uncover Gov’t ‘collusion’


Tribune Business Editor


Baha Mar is “entitled to discover the extent of co-ordination and collusion” between its Chinese partners and the Christie administration in their opposition to the developer’s Chapter 11 bankruptcy protection filing.

The developer’s attorneys, in an August 7 letter to the Delaware Bankruptcy Court, argued that the China Export-Import Bank and China Construction America (CCA) had worked with the Bahamian government to “thwart” the US court’s Orders and “undermine” its authority.

Laura Davis Jones, of the Pachulski, Stang, Ziehl & Jones law firm, urged US Bankruptcy Judge, Kevin Carey, to deny CCA’s request for two ‘protective Orders’ that would prevent Baha Mar from obtaining documentary and witness evidence on the alleged ‘collusion’ between its Chinese partners and the Government.

She alleged that the two sides were engaged in “a bad faith effort” to prevent Baha Mar from restructuring, completing and opening its resort via the Chapter 11 process.

Her letter, and e-mails attached to communication from the China Export-Import Bank’s US attorneys, refer to a Memorandum of Understanding (MoU) that Baha Mar believes is related to the court proceedings underway in both the Bahamas and Delaware.

The MoU, its contents and what it deals with, are not detailed in the two letters, but Baha Mar is seeking “full production” of communications between the Government and Chinese in relation to it.

Ms Davis Jones, meanwhile, expressed doubt as to whether Baha Mar would enjoy an “equitable reorganisation” of its finances if the $3.5 billion development was placed into the care of provisional liquidators by the Bahamian Supreme Court.

And she argued that Baha Mar’s contractor, CCA, “has not” - and will not - be able to provide valid reasons as to why the Bankruptcy Court should block the document production and witness testimony.

“Contrary to CCA’s assertion that the debtors [Baha Mar] seek ‘unwarranted and inappropriate’ discovery’, the debtors seek documents and testimony from a corporate representative on one discrete topic - CCA’s communications with the Bahamian government about the debtors’ proceedings in the US and the Bahamas, including the MoU,” Ms Davis Jones wrote.

She argued that the documents and witness testimony Baha Mar was seeking were “highly relevant” to its battle with CCA and the China Export-Import Bank over their separate bids to dismiss the Chapter 11 case.

The Delaware court will hear those cases next Monday, and Ms Davis Jones reiterated: “The requested information is highly relevant to the contested matters between the debtors and CCA and China Export-Import Bank.

“Specifically, CCA and China Export-Import Bank have co-ordinated with the Bahamian government in pending proceedings in the Bahamas to thwart the orders of this court.

“Indeed, notwithstanding that they are subject to this court’s jurisdiction, CCA and China Export-Import Bank joined the Bahamian government in opposing the debtors’ application to the Bahamian court to recognise the Chapter 11 cases and this court’s related orders,” Ms Davis Jones added, referring to the ruling by Justice Ian Winder.

“Given CCA’s allegations that [Baha Mar[ have acted in bad faith, and that dismissing the Chapter 11 cases is in the best interest of all the creditors and the estate, the debtors are entitled to discover the extent of co-ordination and collusion between CCA, the China Export-Import Bank and the Bahamian Government to undermine the instant proceedings.”

Ms Davis Jones argued that the two ‘protective Orders’ sought by CCA were “yet more gamesmanship in a series of litigation tactics”.

She contrasted this with Baha Mar’s “cooperative response” to CCA’s discovery requests, where it produced the necessary documents and executives for interview in accordance with the schedule called for by the contractors’ attorneys.

CCA’s attorney, Michael Guiffre, in an August 6 letter to the Delaware court argued that Baha Mar’s demands were “wholly irrelevant” to the nature of his client’s bid to dismiss the Chapter 11 action.

He added that Baha Mar was engaged “in a proverbial fishing expedition in order to use the court as a forum to tarnish CCA Bahamas or foreign governments, or for other improper purposes outlined in our objections”.

Mr Guiffre also objected to Baha Mar taking witness statements from Timothy Eneas, the McKinney, Bancroft & Hughes attorney, who is acting as the contractor’s legal counsel in the Bahamas.

While initially prepared to fly Mr Eneas from the Bahamas to Delaware, CCA (Bahamas) then backed off on the grounds that Baha Mar refused to “limit the questions they will ask” the Bahamian attorney.

Mr Guiffre is thus seeking a second ‘protective Order’ to prevent Baha Mar deposing Mr Eneas.

However, Ms Davis Jones accused CCA’s bid to dismiss the Chapter 11 case of relying heavily on “hearsay statements” by the Christie administration relating to its much-hyped winding-up petition against Baha Mar.

These include the Prime Minister’s national address and the Attorney General’s letter to CCA’s Beijing parent on July 17, both of which stated the Government’s determination to made the Bahamas the primary jurisdiction for determining the Baha Mar dispute.

“CCA is effectively urging this [Delaware] court to defer to CCA’s understanding of the desires of the Bahamas,” Ms Davis Jones wrote.

“CCA and its counsel joined the Bahamian government’s opposition to the debtors’ recognition application seeking to have this court’s orders recognised in the Bahamas.

“Accordingly, whether the Bahamian government and CCA co-ordinated in seeking to thwart this court’s authority in the instant proceeding is highly relevant to whether the debtors could ever experience an equitable reorganisation there, and the critical issue of whether proceeding with these Chapter 11 cases is in the best interest of creditors.”

Ms Davis Jones argued that CCA’s claims of ‘ common legal interest’ with the Government was confirmation of the alleged “collusion” between the two sides.

She added that the ‘fishing expedition’ allegations being levelled against Baha Mar were “disingenuous” given CCA’s “apparent co-ordination” with the Government.

“It is highly likely that CCA is in possession of additional communications evidencing collusion with the Bahamian government in a bad faith effort to undermine the instant proceeding, and strip the ability to complete a Chapter 11 restructuring,” Ms Davis Jones wrote.

“CCA’s claim of common interest plainly establishes that its goal is to purely force debtors into liquidation in the Bahamas, and to thwart any attempt by the debtors to restructure under Chapter 11 in these cases.”


ObserverOfChaos 8 years, 8 months ago

So, there must be tons of stuff they want to hide since Mr Guiffre objected to Baha Mar taking witness statements from Timothy Eneas, (the McKinney, Bancroft & Hughes attorney, who is acting as the contractor’s legal counsel in the Bahamas)... Cause Mr. Eneas would have to give full disclosure....which Bahama Govt, CCA etc has been trying to hide....Amazing how corrupt, self serving and deceitful Bahama Govt and Chinese are! Wake up Bahamas....


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