The Tribune

IT APPEARS that whatever government puts its hands to, it bungles.

As if the handling of the Baha Mar tragedy were not bad enough, what we find most shocking is the way in which the Attorney General’s office has pushed the court aside and seems to be macro-managing Baha Mar’s Chapter 11 bankruptcy case itself.

When Baha Mar took its case to the Supreme Court last week, it was to get permission for the Bahamas court to recognise and supervise the Delaware Court’s Chapter 11 bankruptcy proceedings to give Baha Mar time to save its staff, its creditors, regroup, open the hotel and start business moving. Although The Bahamas crows about being a financial centre, it has no Chapter 11 bankruptcy proceedings that will protect a company for a certain period while it mends its fences, and gets its business back on track. If Baha Mar’s bankruptcy had been taken to a Bahamian court, a liquidator would have been appointed, the company would have been shut down, and creditors would now be scrapping for payment. No one would have won. Under Chapter 11, a company is given a chance to reorganise, pay staff and its creditors and move into the future. Under our system, a creditor is faced with a red light that says: “No further”. He comes to the table with an empty hat, and leaves crestfallen with the same empty hat. Under a Chapter 11, if a company is protected for a period in which it can rebuild its business, creditors have a good chance of recouping their losses.

If our readers want an excellent understanding of the benefits of Chapter 11, they should read Richard Coulson’s article, “A chapter of disaster?” It is the Insight column that can be found on the back page of the Business section of yesterday’s Tribune. It can also be found on Tribune242 under Editorial/Insight.

We hear a lot of cage rattling about sovereignty — another red herring if one seriously thinks about the situation now facing this country. The late Dame Eugenia Charles, a great champion of sovereignty, but at the same time a very practical lady, once reminded us that when it comes to feeding a people, you can’t put sovereignty in the pot. Dame Eugenia was the much admired prime minister of Dominica.

Contrary to Attorney General Allyson Maynard-Gibson’s claim, no door was opened under Delaware’s Chapter 11 that would have had “serious and far-reaching implications” to The Bahamas’ sovereignty. Rather it would have protected its Bahamian staff, its creditors and kept the Melia hotel open to guests. After staff and creditors were protected, there was time for the major stakeholders to be joined to the argument.

At all times, The Bahamas and Delaware courts would have been working together – so where does the sovereignty issue come in?

Under Chapter 11, Mr Izmirlian was granted permission by the Delaware court to set aside $80m to cover staff salaries and operating expenses while Baha Mar was being reorganised. All it needed was the approval of the Bahamas court. If approved by our court, staff would have been taken care of for a period of time in the hope that the resort could be put back on track and they would be reinstated in their jobs. There was now time for the Government and the Export-Import Bank of China (EXIM) to join the action.

However, believing that all parties had to be joined at the beginning — a delay that would suspend payment of staff and operating expenses — Attorney General Allyson Maynard Gibson and the EXIM bank asked the Supreme Court to adjourn the Developer’s application for the Bahamian courts to recognise the orders of the Delaware court. Supreme Court Justice Ian Winder adjourned the matter to 10am today.

In her statement, Mrs Maynard Gibson said that the Developer (Mr Izmirlian) “was also advised that in the event that Baha Mar or the EXIM Bank was unable or unwilling to pay the workers, the Government will step in and make the payment for this month while negotiations continue”.

This move on her part made it impossible for Mr Izmirlian to pay his staff out of the $80m that the Delaware court agreed, because that agreement had to have the stamp of approval of our Supreme Court. And our court had adjourned what was obviously an urgent matter to this morning — at the request of the Attorney General!

The workers had now become what the government said it was trying to avoid — “pawns” in a tangled web wound around them by the government — not Mr Izmirlian.

The government has been caught in its own web of deceit. It appears that it is now spinning on its own merry-go round of clumsy foolishness.

Government undertook to pay the staff. It said it had taken out $7.5m to make this commitment. Pay was due at 4pm on Thursday. If our Supreme Court had met and approved the arrangements worked out with the Delaware court, staff would have been paid on time. But now, they were in the hands of the Bahamas government.

On Saturday, the Guardian reported that government had announced on Friday night that it had paid $2m to the employees to cover their salaries. It was claimed that the payments were made directly to their bank accounts for the period ending June 28.

Obviously this was not true, because when Monday morning dawned, staff complained that they had not been paid.

According to Baha Mar, government was given the staff’s salary information as soon as it was requested — which in an efficient organisation would have been in enough time to get the money into each account. However, we are told that Government kept coming back for more and more information about each staff’s banking details. Baha Mar immediately supplied all information, contrary to claims by the Ministry of Finance that payment was delayed because Baha Mar was slow with the needed information. On Monday, staff were asking why government needed all of their banking information, because, instead of a bank transfer, they were told that they going to be paid by cheque.

As of this writing, nothing has appeared in any staff member’s bank account, despite Saturday’s announcement that government had paid out $2m and all was well. Unfortunately, all was not well. The staff were sent home with an empty bank account — pawns in a power play by their own government.

Government is making so many missteps, and contradicting itself so often that we no longer take their statements seriously. As if the handling of the Baha Mar tragedy were not bad enough, what we find most shocking is the way in which the Attorney General’s office has pushed the court aside and seems to be macro-managing Baha Mar’s Chapter 11 bankruptcy case itself.

When Baha Mar took its case to the Supreme Court last week, it was to get permission for the Bahamas court to recognise and supervise the Delaware Court’s Chapter 11 bankruptcy proceedings to give Baha Mar time to save its staff, its creditors, regroup, open the hotel and start business moving. Although The Bahamas crows about being a financial centre, it has no Chapter 11 bankruptcy proceedings that will protect a company for a certain period while it mends its fences, and gets its business back on track. If Baha Mar’s bankruptcy had been taken to a Bahamian court, a liquidator would have been appointed, the company would have been shut down, and creditors would now be scrapping for payment. No one would have won. Under Chapter 11, a company is given a chance to reorganise, pay staff and its creditors and move into the future. Under our system, a creditor is faced with a red light that says: “No further”. He comes to the table with an empty hat, and leaves crestfallen with the same empty hat. Under a Chapter 11, if a company is protected for a period in which it can rebuild its business, creditors have a good chance of recouping their losses.

If our readers want an excellent understanding of the benefits of Chapter 11, they should read Richard Coulson’s article, “A chapter of disaster?” It is the Insight column that can be found on the back page of the Business section of yesterday’s Tribune. It can also be found on Tribune242 under Editorial/Insight.

We hear a lot of cage rattling about sovereignty — another red herring if one seriously thinks about the situation now facing this country. The late Dame Eugenia Charles, a great champion of sovereignty, but at the same time a very practical lady, once reminded us that when it comes to feeding a people, you can’t put sovereignty in the pot. Dame Eugenia was the much admired prime minister of Dominica.

Contrary to Attorney General Allyson Maynard-Gibson’s claim, no door was opened under Delaware’s Chapter 11 that would have had “serious and far-reaching implications” to The Bahamas’ sovereignty. Rather it would have protected its Bahamian staff, its creditors and kept the Melia hotel open to guests. After staff and creditors were protected, there was time for the major stakeholders to be joined to the argument.

At all times, The Bahamas and Delaware courts would have been working together – so where does the sovereignty issue come in?

Under Chapter 11, Mr Izmirlian was granted permission by the Delaware court to set aside $80m to cover staff salaries and operating expenses while Baha Mar was being reorganised. All it needed was the approval of the Bahamas court. If approved by our court, staff would have been taken care of for a period of time in the hope that the resort could be put back on track and they would be reinstated in their jobs. There was now time for the Government and the Export-Import Bank of China (EXIM) to join the action.

However, believing that all parties had to be joined at the beginning — a delay that would suspend payment of staff and operating expenses — Attorney General Allyson Maynard Gibson and the EXIM bank asked the Supreme Court to adjourn the Developer’s application for the Bahamian courts to recognise the orders of the Delaware court. Supreme Court Justice Ian Winder adjourned the matter to 10am today.

In her statement, Mrs Maynard Gibson said that the Developer (Mr Izmirlian) “was also advised that in the event that Baha Mar or the EXIM Bank was unable or unwilling to pay the workers, the Government will step in and make the payment for this month while negotiations continue”.

This move on her part made it impossible for Mr Izmirlian to pay his staff out of the $80m that the Delaware court agreed, because that agreement had to have the stamp of approval of our Supreme Court. And our court had adjourned what was obviously an urgent matter to this morning — at the request of the Attorney General!

The workers had now become what the government said it was trying to avoid — “pawns” in a tangled web wound around them by the government — not Mr Izmirlian.

The government has been caught in its own web of deceit. It appears that it is now spinning on its own merry-go round of clumsy foolishness.

Government undertook to pay the staff. It said it had taken out $7.5m to make this commitment. Pay was due at 4pm on Thursday. If our Supreme Court had met and approved the arrangements worked out with the Delaware court, staff would have been paid on time. But now, they were in the hands of the Bahamas government.

On Saturday, the Guardian reported that government had announced on Friday night that it had paid $2m to the employees to cover their salaries. It was claimed that the payments were made directly to their bank accounts for the period ending June 28.

Obviously this was not true, because when Monday morning dawned, staff complained that they had not been paid.

According to Baha Mar government was given the staff’s salary information as soon as it was requested — which in an efficient organisation would have been in enough time to get the money into each account. However, we are told that Government kept coming back for more and more information about each staff’s banking details. Baha Mar immediately supplied all information, contrary to claims by the Ministry of Finance that payment was delayed because Baha Mar was slow with the needed information. On Monday staff were asking why government needed all of their banking information, because, instead of a bank transfer, they were told that they were going to be paid by cheque.

As of this writing, nothing has appeared in any staff member’s bank account, despite Saturday’s announcement that government had paid out $2m and all was well. Unfortunately, all was not well. The staff were sent home with an empty bank account — pawns in a power play by their own government.

Government is making so many missteps, and contradicting itself so often that we no longer take their statements seriously.