ATTORNEY General Allyson Maynard Gibson today confirmed that the government will pay the salaries of more than 2,000 Baha Mar workers this month as negotiations over the fate of the stalled $3.5bn project continue.
The decision was backed by a Supreme Court order that has adjourned Baha Mar's application for local judicial recognition of its Chapter 11 filing in a US bankruptcy court until next Tuesday.
Mrs Maynard-Gibson said that the Hotel Corporation of the Bahamas was prepared to make the payments for this month, which were estimated by resort officials to average $7.5 million, but would not comment further on whether the government would continue to foot the bill if the matter was not resolved.
Baha Mar on Thursday released a statement saying it “is extremely concerned and disappointed” with the Supreme Court adjournment.
Baha Mar said the adjournment was granted at the joint request of the Office of the Attorney General of the Bahamas and The Export-Import Bank of China, the project’s lender.
“This adjournment unfortunately makes it impossible at this time to act on the US Court approvals we received yesterday (Wednesday), which would allow us, among other things, to pay salaries and benefits for Baha Mar citizens as well as pay ordinary course suppliers and vendors for goods and services post the commencement of the Chapter 11 process. The adjournment has very troubling implications for both the Chapter 11 process and our efforts to position Baha Mar to complete construction and open successfully.”
The Supreme Court has directed Baha Mar, at the request of the Office of the Attorney General, to provide the government with information necessary for the government to pay the salaries of the more than 2,200 Baha Mar employees for the period ending July 3, 2015.
Baha Mar said it is complying with this direction, although the company noted that the government’s “unorthodox request for the direction appeared redundant in light of the US Court yesterday (Wednesday) granting Baha Mar its DIP financing and approving Baha Mar’s motion to operate and fund its payroll in the normal course.”
Baha Mar added: “The government’s objection is quite alarming. As we have made clear all week, time is of the essence for Baha Mar. Having Baha Mar succeed is extremely important to the long-term economic well being of the country.
“We are working as hard as we can on as many fronts as possible to move matters along toward completion and opening of the Baha Mar project. Extensive efforts to reach a compromise with our lender and our contractor have been fruitless and if we are frustrated in taking advantage in The Bahamas of the US Chapter 11 process for very much longer, drastic and regrettable steps, including substantial staff reductions, will have to be taken.”
See Friday’s Tribune for more on this story.