By KHRISNA VIRGIL
Tribune Staff Reporter
kvirgil@tribunemedia.net
A PARTNER at one of the country’s leading financial firms yesterday said while Baha Mar’s court battle might be “protracted”, the Christie administration’s “reactionary” response to resort CEO Sarkis Izmirlian’s Chapter 11 bankruptcy filing in the US should be seen as a bid to protect this country’s interests.
Gowon Bowe, of PricewaterhouseCoopers, moved to clarify what liquidation in The Bahamas could mean for Baha Mar, stressing that in a situation such as this the intent by the government is for the resort to be placed in the hands of an independent entity who is free of emotion and contention.
He said while the Baha Mar development has taken an “unprecedented” direction, it is important to cut through the pandemonium, leaving the emotions out of the equation to reach a resolution.
Last week, Attorney General Allyson Maynard-Gibson filed an involuntary winding up petition against the 14 Bahamian incorporated companies that make up Baha Mar in the Supreme Court.
If the petition is approved, this would effectively pave the way for a court-appointed provisional liquidator to supervise the completion and opening of Baha Mar in the shortest possible time.
“Liquidation in the Bahamas is essentially a stop and sale action saying this entity can no longer pay all of its bills,” Mr Bowe said, when contacted for comment.
“But the intent by the government is not to stop and sell but to take it out of the hands of the party with the emotion and the contention and put it into the hands of an independent entity. It is for all parties to set out a restructuring exercise.
“Given that the developer already set in motion a court action, it was important that the Bahamas had carriage of the matter so it was wise and prudent that the government take the necessary steps, although reactionary, to ensure its interests are met.”
Mr Bowe, also the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman, said there were several lessons to be learned from the Baha Mar impasse.
“We have to consider how we update our laws more from a procedural perspective.
“Also, there has to be a closer look at understanding the financial implications in the investment opportunities presented to us. There is also much to be considered in how we go about leasing or selling prime property. In other parts of the world extended leases are often the route taken. So the land policy needs to be looked at. We must be sensitive to how we layout these laws,” Mr Bowe said.
Supreme Court Justice Ian Winder is expected to give his decision today on Baha Mar’s application to have its bankruptcy filing in the US recognised in this jurisdiction.
Comments
GrassRoot 8 years, 9 months ago
How can bowe accept to be a liquidator? The fairy tale of lies and money continues...
Well_mudda_take_sic 8 years, 9 months ago
This Bowe fella tells us to be free of emotion but he had plenty of emotion in supporting Christie's introduction of the harshly regressive VAT that is taking a dreadful toll on the poor in our country today. He's right about one thing though: “Liquidation in the Bahamas is essentially a stop and sale action....". The project has certainly been "stopped" and will now be "sold" to the Chinese for pennies on the dollar thanks to the mega-millions of dollars in losses the Bahamian government has forced the Izmirlian family to incur by the de facto "nationalization" of their circa US$800-900 million investment in the 97% complete Baha Mar development.
Reality_Check 8 years, 9 months ago
What foreign investor in their right mind would come to the rescue of the Baha Mar development knowing that our corrupt Bahamian government and the Chinese are snuggly in bed together and therefore might at any moment pull the same illegal (unconstitutional) nationalization stunt on them. Now only the Chinese and our corrupt government can complete, own and operate the "new" Baha Mar, and we all know what that means: Bahamians need not apply! Thousands of work permits will now be issued to incoming Chinese low level labourers and higher paid workers for jobs in the hospitality industry, even before completion of the project. For those of you staying...start brushing up on your Mandarin. Remember Bowe, you are to do as the Wicked Witch tells you to do or else! She speaks at the behest of Christie himself on all matters relating to Baha Mar. Christie told Maynard-Gibson to "take possession and control" and "nationalize" she did!
EnoughIsEnough 8 years, 9 months ago
to be free of emotion and contention means leave it in Delaware where there is no financial, personal or emotional association by the courts. There isn't anyone in the bahamas who could oversee this without emotion, opinion, relationships getting in the way - i just don't see it happening.
Well_mudda_take_sic 8 years, 9 months ago
Justice Winder fatally erred in his decision in as much as Baha Mar has never been technically insolvent under the insolvency laws of the Bahamas. As publicly admitted by the Christie-led PLP government, the concessions alone granted to the development have considerable value, upwards of the equivalent of US$1.2 billion. This is in addition to the circa $3.2 - $3.5 billion that has already been expended to bring the project to its publicly announced 97% completion state. A consolidated statement of financial position of the Baha Mar development prepared on a fair value basis immediately prior to the Bahamian government's announcement that it would petition for the liquidation of the project, would undoubtedly show that total assets exceeded total liabilities, in which case Baha Mar was technically solvent notwithstanding its liquidity problems. Much of this net asset value was immediately destroyed though upon the liquidation announcement by our government; and most of the destroyed value related to the Izmirlian family's equity stake in the project which has, for all intents and purposes, been wrongfully nationalized. The definition of bankruptcy under a Title 11 filing in Delaware is not the same as the definition of insolvency under the laws of the Bahamas. Therein lies the injustice of the petition for liquidation filed by our government. The Title 11 bankruptcy proceedings would have allowed for the liquidity problems to have been worked through by Baha Mar in an equitable way for all stakeholders; the same is not true of a liquidation proceeding in the Bahamas.
lucaya 8 years, 9 months ago
Throughout this "articulation of professed lawyer's babbling" a mention of what is owed to all creditors?Is it below or above Baha mar liabilities?
MonkeeDoo 8 years, 9 months ago
Gowon Bowe is a funny fella. After pointing out the pitfalls of Vat, someone must be sweet him up and he fall right in the vat. Now Christie says he wants PwC to be the liquidator and he jumps right in the vat again. I think NOW is a good time for him to resign from the BCCEC. You can't be in the Government's pocket AND properly represent the commerce of this country that the Government is hell bent on destroying.
DEDDIE 8 years, 9 months ago
I was curious to see how the Atlantis takeover was handle and to my surprise it was handle in Delaware. Apparently most bankruptcy cases in the United States are file in Delaware Chancery Court. This court has been dealing with such cases from 1791 and it is their core competency.
John 8 years, 9 months ago
The fear I have for Bah Mar is that even when all this legal wrangling is over about ownership and who owes whois over and done with, there will still be a great battle to turn this property into a success story. It is not that the world economy is such that there are hundreds of persons coming to the Bahamas on a weekly basin and cannot find living accommodations. Bah Mar will have to create its own market and build its own customer base. It will have to attract persons to the Bahamas and to Bah Mar. This will take some time, especially after all the negative publicity surrounding the property. It is understood that Izmirilian, through his other business ventures has access to many of the high rollers needed to create a good customer base at the resort. It was also mentioned that the Chinese would attract high value persons from China to the resort but now that country (China) seems to be rapidly sliding into a recession. No one (except the lawyers) is benefitting from the property sitting idle and not completed and the longer the standoff drags on the ore value and chances for success the property will lose
DEDDIE 8 years, 9 months ago
Don't forget the receivers, they get pay before all others.
Well_mudda_take_sic 8 years, 9 months ago
I recollect the Bahamian government putting the squeeze on the Japanese financial institution that had financed the Emerald Bay development. I believe it was Mitsui Finance that lent the original developer many millions of dollars to develop Emerald Bay. Tough times came around for the developer and Mitsui Finance applied the screws to the developer, effectively foreclosing on the property. The Bahamian government in turn then applied the screws to Mitsui Finance, eventually forcing the appointment of PwC as receivers to find a new buyer for the property. It took a few years for PwC and the Bahamian government to find a buyer for the Emerald Bay property. Sandals All-inclusive Resorts was the eventual buyer at a fire sale price that left the Japanese (Mitsui Finance) with a very bad taste in their mouths. Needless to say, that was the last time the Bahamas saw any significant Japanese connected foreign direct investment. The Japanese by their nature accepted their losses as they were not inclined to enter into a legal battle with PwC or the Bahamian government. We can be assured things will be very different in the case of the losses wrongfully caused Baha Mar by the actions of, among others, the Christie-led PLP government!
RealDeal 8 years, 9 months ago
How much will the liquidators be comensated for this and how much will they compensate Christie for sending them the business?
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