By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Democratic National Alliance’s (DNA) leader yesterday said the Supreme Court might be “hard-pressed” to resist Baha Mar’s Chapter 11 demands due to a law that allows foreign judgments and orders to be registered in the Bahamas, subject to certain conditions.
Branville McCartney told Tribune Business that the Reciprocal Enforcement of Judgement Act 1924 might make it “very difficult” for Justice Ian Winder to refuse Baha Mar’s demands for recognition of the Chapter 11 bankruptcy protection proceedings in Delaware, should the dispute over the $3.5 billion project require Supreme Court intervention.
“I certainly can’t speak for the judge, but if it’s [the Delaware Bankruptcy Court] a court of competent jurisdiction that made the Order, it could be very difficult for the Bahamian judge not to recognise that Order,” Mr McCartney told Tribune Business.
“If the Delaware court complies with the conditions set in the Reciprocal Enforcement of Judgment Act, the Bahamian court might be hard-pressed not to invoke the terms of that Order for it to have effect in the Bahamas.”
Mr McCartney, an attorney himself, directed Tribune Business to the website of his own law firm, Halsbury Chambers, and a summary of the Reciprocal Enforcement of Judgment Act that it posted some two years ago.
This confirms that “judgments obtained outside of the jurisdiction of the Bahamas can be registered in the Bahamas” provided they comply with the requirements set out in the Act’s chapter 77.
A judgment is defined in the Act as “any judgment or order given or made by a court in any civil proceedings”, yet it is by no means certain this piece of legislation will assist Baha Mar’s cause - although it may well be central to the developer’s legal arguments should the court battle resume next Monday.
Based on the Halsbury Chambers website, there is no case law or legal precedent involving the Reciprocal Enforcement of Judgment Act and its use to recognise, and give legal effect to, Orders emanating from a Chapter 11 bankruptcy protection case in the US.
And both the Government and Baha Mar’s Chinese partners - the China Export-Import Bank and China Construction America - will clearly be resisting any bid by Baha Mar to have the Chapter 11 proceedings recognised by the Supreme Court.
They will argue that just one of the 15 Baha Mar entities that have filed for Chapter 11 protection are domiciled in Delaware, with the rest incorporated here.
And, given that it is a Bahamas-based project, with Bahamian-based jobs, creditors and an economy that will be most greatly impacted, the Government and Chinese will doubtless press for this jurisdiction to be the centre of all judicial action.
Meanwhile, Mr McCartney said it was “very curious” that no Bahamian companies had been named to Baha Mar’s unsecured creditors committee by the US bankruptcy trustee.
Tribune Business revealed yesterday that only US-based companies had been appointed to that committee, the closest Bahamian connection being Osprey’s joint venture construction partner, Yates.
The Bahamian contractor and its partner were listed as Baha Mar’s third largest unsecured creditor with $5.28 million owing to them.
China Construction America, at $72.6 million, and the Bahamas Electricity Corporation (BEC) at $19.5 million, were listed as the largest two unsecured creditors, neither of whom have been appointed to the Baha Mar creditors committee.
“I am surprised they are not named,” Mr McCartney told Tribune Business of the several thousand Bahamian creditors of Baha Mar. “I would certainly question why they were not named.
“That’s very unfortunate. I really would want to know what that is the case. A lot of Bahamian creditors are owed a lot of money, and that has an affect on the Bahamian economy. It is surprising they’ve not been appointed.”
Other members of the Baha Mar creditors committee include SBE Hotel Management, the SLS brand operator, which gives Baha Mar’s hotel operating partners a seat at the table.
Also present is Terracon Consultants, who are understood to have been the ‘structural engineers of record’ for the Baha Mar development in partnership with Bahamian firm, Integrated Building Systems (IBS).
Another creditor committee member, Suddath Global Logistics Bahamas, while appearing to be a Bahamian company, is headquartered in Jacksonville in Florida, based on its mailing address.
The final three creditor committee members are Purchasing Solutions International from Fort Worth, Texas; Las Vegas-based Schadler Kramer Group; and AECOM Technical Services, another US company.
Comments
a2z 8 years, 9 months ago
Whether the Bahamian judge upholds the Delaware ruling, or the entire matter is adjudicated in The Bahamas, thousands of Baha Mar workers had better already be looking for work elsewhere, or take this opportunity to become entrepreneurs with their respective talents.
Commander_bud 8 years, 9 months ago
The long arm of the law.
Well_mudda_take_sic 8 years, 9 months ago
Bahamian creditors who were directly contracted by the principal general contractor (CCA) as opposed to Baha Mar would not be listed as CCA itself is listed as a creditor.
banker 8 years, 9 months ago
The Reciprocal Enforcement of Judgement Act is Bahamian Law, and that is why the Chapter 11 in Delaware had such shock and awe among the ruling kleptocrats. The judge would have to break Bahamian law to rule in favor of the government and the Chinese. In that case an appeal to the Privy Council would reverse any untoward ruling by the Bahamian courts and enforce the Delaware ruling, negating any possible further moves that could be tried by the duplicitous, corrupt Attorney General. It won't be pleasant, as they will try to drag it out as long as possible to try to starve Izmirlian out, but ultimately failing. The real losers will be the employees and the Bahamas, who is already on the losing side of the ledger.
This appeal to the Privy Council would prevent the AG from being able to repossess the land (as Izmirlian is the debtor in possession). This is by no means, a slam dunk for the Izmirlians, and the road is a tough one, with the government flailing about and using its illegal influence over the judiciary.
The most amazing thing is how certain segments of Bahamian society who were hypercritical of the Christie government are now lionizing them and the Chinese. The PLPites will twist and bend the truth, the sovereignty of the nation and their own personal self-respect to try and gold-plate the turds of turmoil that Christie & Co have created. The government is just a fifth wheel here, adding no value proposition to the saga, and they should just step away, and let the business people and the real courts solve it one way or the other. This is just a business venture gone sour, but because the current government pinned their pride and hopes on it, they have imbued it with a cognitive load that doesn't really exist.
You can bet that this case is receiving a lot of attention from the US State Department.
What is hilarious (in a sad sort of way) is that the PLP government doesn't understand the cultural values of the Chinese. As a previous poster pointed out, it was so wrong to send the AG over. I am no fan of Fweddie, but if he wasn't such damaged goods in the eyes the Chinese, he would have been the best player on the PLP team to do this. The Chinese only understand people who have a superior attitude and no respect for them, and Fweddie fills the bill. And race does play a role. The best Bahamian for the job of getting an agreement would have been Brent -- Mr. Salt. He has the most respect among the Chinese (mainly because of skin colour -- the Chinese are racists towards Blacks).
So we dig in for a long and sordid story and dragging the Bahamas through the mud, unless the government has a road-to-Damascus moment and sees the light and lets go.
Facts 8 years, 9 months ago
The reason why Bahamian Company has not taken participation in Delaware court because if they do they admit with Delaware Jurisdiction and loose the case to file against Bahamar in Bahamian Court. To all Bahamian Companies; check with your lawyer before you take any part in Delaware Court.
Well_mudda_take_sic 8 years, 9 months ago
Probably some of the most astute comments written to date on this subject, notwithstanding the blunt truth about the racial leanings of the Chinese.
Facts 8 years, 9 months ago
The reason why Bahamian Company has not taken participation in Delaware court because if they do they admit with Delaware Jurisdiction and loose the case to file against Bahamar in Bahamian Court. To all Bahamian Companies; check with your lawyer before you take any part in Delaware Court
Facts 8 years, 9 months ago
Chinese does not understand racial separation; fact is that there is no racial separation in Asia; rise above this race issue. Delaware court has no jurisdiction over Bahamas. Even Puerto Rico US territory can not file for Chapter 11. If Bahamar is allowed chapter 11 then Bahamian creditor can also go to Privy Counsel and ask for justice. Bahamian companies signed contracts with BML Bahamian entity and should be allowed justice in Bahamas Court; not Delaware.
Hogfish 8 years, 9 months ago
there's only one way Winder is going to decide. He was after all once partner in sticky-finger davis law firm.
nuff said.
Sign in to comment
Or login with:
OpenID