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Baha Mar Opening ‘Unlikely To Be Soon’

By LAMECH JOHNSON

Tribune Staff Reporter

ljohnson@tribunemedia.net

BAHA Mar’s prospects of opening in the “foreseeable future” are unlikely on its current path, British Queen’s Counsel Peter Knox told a Supreme Court judge yesterday.

Mr Knox appeared as the government’s lawyer in the Supreme Court yesterday as arguments began on the Crown’s winding up petition against Baha Mar.

He raised this and many other arguments during the hearing in an effort to convince Justice Ian Winder to facilitate the appointment of provisional liquidators who will make arrangements between the resort’s stakeholders to speed up the development’s completion.

The government is seeking to wind up Baha Mar Ltd, Baha Mar Land Holdings Ltd, Baha Mar Properties Ltd, BMP3 (Wyndham Hotel) Ltd, BMP Golf Ltd, Cable Beach Resorts Ltd and Baha Mar Enterprises Ltd on the basis that is owed upwards to $59m by the mentioned companies.

“There’s no real prospect for the completion of the project in the foreseeable future as it stands now,” Mr Knox told the court. “There was a prospect… there was a deal on the table requiring Mr (Sarkis) Izmirlian to come up with a guarantee of $200m.”

Mr Knox stressed that the project needed to “be put back on track to avoid a downgrade in The Bahamas’ credit rating and the employment situation”.

“It is in the public’s interest that this company is wound up,” he added, citing the number of concessions given to the resort and its inability to open as a failure to deliver on its promised national benefits.

On June 29, Baha Mar and 14 of its affiliated companies filed for bankruptcy in a Delaware court, blaming the resort’s contractor, China Construction America (CCA), for the construction delays that caused it to miss previous opening deadlines.

The resort also took legal action against CCA’s parent company China State Construction Engineering Corporation (CSCEC) in the English High Court.

On July 1, US Judge Kevin Carey approved the resort’s request to begin tapping into $80m in financing to keep the resort on track for opening while it undergoes Chapter 11 bankruptcy proceedings in that state.

However, the Delaware judge’s approval of the debtor in possession financing request was conditional on the approval of the Bahamas’ Supreme Court.

Justice Winder, who presided over Baha Mar’s application for the foreign court’s ruling to take effect, dismissed that application.

At the very start of yesterday’s proceedings, Mr Knox was in defence mode after Baha Mar’s legal team of fellow QCs, James Corbett and Maurice Glinton, sought to challenge the attorney general’s jurisdiction in bringing the petition against a number of Baha Mar’s affiliated companies.

Mr Knox informed the court that seven new petitions had been filed against Baha Mar in addition to the original one if the judge accepted Baha Mar’s position that the attorney general’s petition was invalid.

Mr Knox said the government was not seeking to wind up the multi-billion dollar resort today, but merely to have provisional liquidators appointed who will make arrangements between the parties to speed up the resort’s completion.

Wayne Munroe, QC, who appeared on behalf of the government’s petition to have outstanding gaming taxes returned, defended Mr Knox’s submissions that the government’s counsel should be heard first before Baha Mar’s application to strike out the petition was made.

Justice Winder went on to rule that Mr Knox would give submissions first on whether the government’s petition is valid before giving the floor to Messrs Corbett and Glinton on the point they raised.

However, neither of Baha Mar’s lawyers had an opportunity to present their submissions yesterday as Mr Knox took up the remainder of the court hearing with his arguments.

Mr Knox spent some four hours expanding on the first four of five arguments: whether the respondents (Baha Mar) are insolvent; if the petitioners have legal standing as creditors; were there just and equitable grounds for the petition; should provisional liquidators be appointed; and who will be the provisional liquidators.

Addressing the first point, Mr Knox made repeated references to documents filed in Delaware at the end of June where the estimated liabilities of six of the seven named companies were more than $1 billion and more than exceeded its assets.

Concerning the second basis for the petition, Mr Knox argued that the government is a current creditor of Baha Mar given that the resort owed a substantial amount of money to a number of public entities.

The greatest sum – some $26.33 million – is owed to the Bahamas Electricity Corporation (BEC), Mr Knox highlighted.

Other debts include: $3.087 million owed to the Water & Sewerage Corporation; $3.342 million in real property tax arrears; $303,337 in business licence fees (broken down into $289,854 owing for the Wyndham hotel and a further $13,482 due on the Cable Beach golf course) and a total $697,446 in unpaid National Insurance Board contributions, including interest, on behalf of staff for the months of April and May 2015.

Baha Mar also allegedly owes the Gaming Board some $11.219 million in unpaid casino taxes.

Mr Knox said while Baha Mar would dispute the amounts owed, it is not disputed that it owes the government entities.

On the third issue, Mr Knox argued that it was “clear from admitted evidence that the government’s loan to the project was for the development of Baha Mar for the benefit of the people of the Bahamas.”

Mr Knox said that between China EXIM Bank’s $2.45 billion loan and the government’s $1 billion in concessions, the resort was supposed to become one of the largest employers in the country and a significant contributor to GDP over the next two decades.

“This project was always for national benefit and now that it cannot be satisfied, it must be wound up,” Mr Knox said.

He is expected to conclude his submissions today when proceedings continue at 10am.

Comments

Well_mudda_take_sic 2 years, 1 month ago

When the corrupt Christie-led PLP government's lawyer, Mr. Knox, says, "It is in the public’s interest that this company {Baha Mar} is wound up”, he really means it's in the interest of Christie and his corrupt political friends and business cronies, including his new corrupt Chinese friends, that Sarkis Izmirlian's $900 million plus equity interest in the project be effectively nationalised by expropriation!

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Honestman 2 years, 1 month ago

Prediction: Izzie will leave the Bahamas for good but not before doing EVERYTHING in his power to make sure this resort does not open before May 2017. He has the money to mount every legal challenge and he will have the motivation to embarrass the **** out of this government. Can anyone blame him?

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asiseeit 2 years, 1 month ago

I would be surprised if that was all he did, 900 million is allot of money, even for the likes of S.I.

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sal329 2 years, 1 month ago

Why did the court not include ALL those patrons who are owed huge amounts of money for our NON REFUNDABLE airline tickets etc,etc,. ????

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MonkeeDoo 2 years, 1 month ago

Those Patrons are all foreign - they don't count.

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Chucky 2 years, 1 month ago

Why does no one discuss the fact that the deadline of Dec 2014 was missed.

Then the second opening in March (i believe) was missed.

We can be 100% certain the first deadline was missed due to the China contractors screw ups and being behind schedule. Even the chinese contractor can't dispute this.

As for the second scheduled opening, well the chinese contractor was already on a go slow work program, and seems at that point they were contesting their deal & payments from Baha Mar.

However, had the contractor, met their schedule, Baha Mar would have opened Dec 2014, and would not have entered into any cash crunch.

Knowing all that, why is there so much support for the chinese contractor?

Why is there so much opposition to Baha Mar's stance that the contractor must go?

Clearly this was the result of a strategy to break the developer, china and our government all part of the scam.

Izmerlian would have been up and running 9 months ago if it were not for this?

Makes you wonder about investing in anything here?

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Craig 2 years, 1 month ago

I could not agree with you more. I can't believe the government is glazing over the fact that the disaster named CCA is the sole cause of this resort not being opened. Had they met their contractural obligations heads would be on beds!! SI is being penalize for CCA's failings

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countryfirst 2 years, 1 month ago

Christie and the Chinese had this planned they just didn't foresee S.I. seeking protection in the U. S. Christie and crew sold us out for a few million dollars they are all corrupt and need to go.

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ThisIsOurs 2 years, 1 month ago

Hmmm Wayne Munroe fighting to get gaming taxes for the gaming board while at the same time fighting for the webshops to pay as little taxes as possible....when the movie or tv series is written about this they will call it "The Conflict Games"...

Btw are Davis & Co, Wayne Munroe and Allyson Gibson the only lawyers/law firms in town?

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