BAHA Mar developers today filed a claim in the English High Court against the parent company of its general contractor, China Construction America.
The claim against China State Construction Engineering Corporation Ltd seeks financial remedies for alleged liabililities in respect guarantee and performance obligations related to the construction of the project.
Baha Mar Ltd is represented by a team from Kobre & Kim (UK) LLP led by Andrew Stafford QC.
The claim comes a day after the $3.5 billion mega resort in Cable Beach voluntarily filed for Chapter 11 bankruptcy in the United States, in order to finish construction and open the property as soon as possible.
Baha Mar is six months behind its December 2014 opening deadline. It has missed subsequent opening dates in March and May of this year.
See Wednesday's Tribune for more on this story.
Comments
asiseeit 8 years, 10 months ago
The Bahamas and her citizens are the only ones who will lose in this situation. Once again our leaders backed the mega resort when we should have gone the Eco-resort route. Ego seems to be one of our major downfalls. Lets hope this situation does not totally melt down and we are left with another Coral Harbour type situation. Also the developers better put in some top notch anti-theft measures, certain sectors of our society will strip that land bare in a heart beat if they do not.
jackbnimble 8 years, 10 months ago
Agreed. Turning out to be one big embarrassment and at the end of the day our country is left holding the bag.
Chucky 8 years, 10 months ago
hey Jackbnible; baha mar is much less embarrassing than the daily status quo as exhibited by the masses of bahamians and the vast majority of our politicians. Baha Mar likely shouldn't of happened. Who can possibly make money when the average cost per room is a million bucks; costs are too high, and both chinese and bahamian labour are absolutely no good.
But don't worry yourself about the embarrassment from Baha Mar, it doesn't hold a candle to what we've been doing to ourselves since we gained independence!!!!!!!!!
BahamaPundit 8 years, 10 months ago
Agreed. They need to ensure the premises are highly secured: patrol dogs and a small army of security or that place will be looted and stripped bare. All hell will break loose.
Well_mudda_take_sic 8 years, 10 months ago
These preemptive strikes are all about the Izmirlian family endeavouring to cut their losses on the Baha Mar project. Suits against the Bahamian government are sure to follow. Izzie and his crew carefully crunched the numbers before he went public about all the problems and issues a few months ago. They have come to the rude awakening that the total development and other costs to date are such that the future operations of the development, once completed, will not be profitable for many years to come. Without legal remedies that result in very significant debt concessions from the Chinese, Izzie will be pushing up daisies long before the property's businesses turn an aggregate annual profit. Truth be told though, there are many hotels and attractions in the nearby Orlando and Miami areas that offer a lot more to their visitors than Baha Mar will ever be able to offer. Unlike Atlantis, Baha Mar is sorely lacking in distinctive features that will set it apart from its competition as a major tourist destination.
BahamaPundit 8 years, 10 months ago
I tend to agree with you. The investors likely realized quite some time ago that the project was doomed to failure. It must have been evident when they attempted to book the hotel for its opening that the numbers didn't add up to profitability. The investors over-estimated the current pull of the Bahamas in the global tourism industry and also didn't anticipate that Cuba would be opening up.
Economist 8 years, 10 months ago
How will the rating agencies dal with The Bahamas now. Remember S&P and those were counting on Baha Mar to boost the Bahamian economy.
If our rating falls the cost of the country to borrow money could go up substantially.
Economist 8 years, 10 months ago
How will the rating agencies deal with The Bahamas now. Remember S&P and those were counting on Baha Mar to boost the Bahamian economy.
If our rating falls the cost of the country to borrow money could go up substantially.
B_I_D___ 8 years, 10 months ago
Also those 10,000 jobs the govt dem been promising since 2012...well....gonna be more layoffs than hires for just now!!
TalRussell 8 years, 10 months ago
by TalRussell
duppyVAT 8 years, 10 months ago
Izzie is cutting his losses ..................... his dream has gone up in smoke .............. Baha Mar is now on the market as a very expensive repo ............. Who will buy the white elephant??????
When we say it will become a Chinese ghost city yall laugh ................ the Chinese done get their money, their labour and their building materials out of this deal .......... time to move on
Perry needs to go back and find his friends he partied with in Las Vegas to arrange a fire sale and get the broke-ass Russian outta here quick, fast and hurry.
Thats the Bahamar reality 2.0
GrassRoot 8 years, 10 months ago
I respectfully disagree. It seems that both the Chinese as well as the Government (for different reasons) sat on their behinds, while Baha Mar was almost bleeding to death. Obviously the Chinese wanted to pick up the crumbles for jump change, and the Government simply does not have the skilled negotiators/leverage vis a vis the Chinese to get anything going. The bankruptcy filing as well as the law suit have put a lot of pressure on all the parties, incl. the Government to get Baha Mar going, else everybody loses.
GrassRoot 8 years, 10 months ago
Baha Mar will be successful. It is telling that the developer goes out of his way to avoid Bahamian courts (bankruptcy and claims for damages). Still I believe it is smart to totally take the Bahamian government out of the occasion. The current government has clearly eggs in their face siding with the Chinese over the Bahamian interests, it is biased and incapable of cutting a deal with the Chinese as the Government has zero leverage. What most likely will happen is that the Chinese will agree to settle at a discount, ensure to have the project finished and I bet, the developer has a consortium of hedge funds already lined up to take the Chinese's position. If that happens, it will be a good thing for the Bahamas, as we cant really allow a foreign government to control more than 50% of the FDI into the Bahamas. It really does not matter whether you like S.I. or not, the result will be a good one for the Bahamas.
ThisIsOurs 8 years, 10 months ago
I hope you are right.
duppyVAT 8 years, 10 months ago
Keep drinking Perry koolaid ................ SIGH
GrassRoot 8 years, 10 months ago
lol. just keep in mind, American Airlines was operating under Chapter 11 for years. its a business run under court supervision that will ensure that the agreed upon rules of engagement are respected and followed by all the parties. What I don't like though is that our Hon. AG gets involved. Again, she has no business in that. Its a court issue ultimately, not an AG issue. So being muted, PGC released the bulldog again.
Chucky 8 years, 10 months ago
Grasshoot : you must be smoking dope to surmise all that.
GrassRoot 8 years, 10 months ago
Yes, we should grow some weed on the Baha Mar's Golf course to increase GDP.
banker 8 years, 10 months ago
The American journalist who posted here a couple of times, was spot on the money. He predicted all of this. His other chilling prediction is that Baha Mar will never be finished and will turn into the empty building shells that the hotel and casino in Grand Bahama have become. The only use that those buildings, owned by Genting I believe, are for the suicides who throw themselves off the roof.
The estimate of $80 million to complete is a laugh. I was talking to a consultant who came specifically to inspect the property (he wouldn't tell me who employed him) estimates about another $400 million or more to complete. And from what he has seen, all buildings need remedial work to become useful.
He also brought up the conundrum of the chicken and the egg airlift syndrome. Currently there is not enough airlift to sustain Baha Mar. There aren't just enough seats on current flights support it. The only way that the airlines will add airlift, is if there is a demand, and the demand can't be demonstrated until you can get those sufficient numbers on the current airlift, which is impossible. So even half-filling each hotel is currently not possible even if it were open.
The consultant pointed out that there is still ample spare room inventory in the Bahamas without Baha Mar opening. So in essence, his thought is that Baha Mar is doomed because if it were open, if it were built to exacting standards, if it were able to offer a tourism product to the public, other factors would preclude it from succeeding.
Baha Mar was said to be too big to fail. Unfortunately, that is the reason why it will fail. It's size cannot be economically sustained, even in a perfect confluence of all of the factors necessary to the success of a project like this.
This is the bellwether that marks the final decline of tourism in the Bahamas as a viable first pillar of the economy.
Zakary 8 years, 10 months ago
The American journalist who posted here a couple of times, was spot on the money.
Yeah it's really scary, here's http://www.tribune242.com/news/2015/m...">what the journalist said for those who might want to know;
I am the U.S. reporter who got the scoop for Hotel News Now on March 24 that the March 27 opening was not happening. The Prime Minister was wrong to say "Too big to fail." Baha Mar is actually "too big to succeed" -- and that was the problem all along. None of the experts I have been talking to think it will ever open at this point (it will likely go into bankruptcy and then start a legal battle between Baha Mar, China, the hotel brands and the Bahamian government that I am told could last 10 years). And most experts think because of its size and extremely high costs of operation when/if it does open, neither China nor the Bahamas will be able to find a buyer, even if they give it away in a sweetheart deal. Tragic, but true. Ite will become known as the biggest disaster in the history of the hotel industry and a case study in how to do the worst PR ever. Sandy Sands will be a joke by then, if he is not already. And to me, the most incredible thing about Baha Mar is that no one has been fired for ongoing and gross incompetence.
concernedcitizen 8 years, 10 months ago
Izzie had a dream but not the cash ,he came here and bought out Ruffin ,PGC client ,with Scotia money ,then he tried to get Harrah,s money and they split ,then he used Chinese money and now its time to at least pay the interest he wants to run to bankruptcy court and sue ..I saw many post on FB about not making this political ,,Hey PGC brought him and PGC and J Smith also let Kerzner leverage Atlantis to expand elsewhere ,something Ping or Papa would never do ..
concernedcitizen 8 years, 10 months ago
China would have giving more financing but they wanted more equity ,SI decided to use courts to try and stiff them ,Read Baha mar runs out of money today
Alltoomuch 8 years, 10 months ago
Has no-one else ever heard the expression - " the bigger they are, the harder they fall" Anyone noted the size of Baha Mar?? and they said Atlantis was too big!
savoirfaire 8 years, 10 months ago
If developer did not anticipate the Cuba threat he had his head in the sand or he is an idiot. Opening of Cuba has been looming on the horizon for some years now. I scratched my head when I first heard of Baha Mar project because of the impending Cuba threat. Cuba will put a nail in the coffin for many Bahamian and Caribbean islands.
John 8 years, 10 months ago
Is Bah Mar too big to Fail? Was the Titanic too big to sink? What Now? Even after this government saw Bah Mar was about to crash and burn little was done for search and rescue. The Bankruptcy filings allows for Izmilan some latitude to try get the property completed and opened and the lawsuit puts even more harness (legally speaking) on the China Construction Company to complete its work or at least be exposed to liability for shoddy and uncompleted work. what happens if the property cannot emerge out of bankruptcy? The China Ban and the China Construction will still have the lions share of claim to Bah Mar and they can pay off the minority claimants and gain full control of Bah Mar. This is a dangerous scenerion for the Bahamas economically speaking.
Abaconian 8 years, 10 months ago
Truth be told. Bahamar should never have been built in the first place. Just another unsustainable tourism fantasy.
banker 8 years, 10 months ago
Well it is all cooked and done today anyway! Today the US is announcing the restoration of ties with Cuba -- the plans and the date. http://www.aol.com/article/2015/07/01...">http://www.aol.com/article/2015/07/01...
Everyone assume the position, put your head firmly between your legs, and kiss your azz goodbye.
The good times are all gone.
savoirfaire 8 years, 10 months ago
The Bahamas, like other island nations, need to quickly reassess where they stand in the tourism industry. Cuba is hungry, the workforce is eager to please with a great work ethic. US tourist are highly curious to see Cuba. Once commercial flights begin to Cuba it will be a significant drain from Bahamas. The north coast of Cuba is a fabulous cruising ground for yachts. As Cuba improves its boating infrastructure the race will be on. One solution for Bahamas to benefit will be to convince boaters to hop scotch from South Florida down western islands to Cuba. Make a circuit South Florida, Nassau, Exuma Cays, Ragged Island and jump off to Cuba. Then return to US via Florida Keys. The world of tourism has changed now and it will never be the same in The Bahamas!
Reality_Check 8 years, 10 months ago
EMPHASIS TO KEY POINT MADE BY "BANKER" IN COMMENT TO ANOTHER ARTICLE: Sarkis Izmirlian and his legal representatives outside of the Bahamas must always be mindful of the fact that Perry Christie and his Cabinet are as firmly in bed with the Chinese as they are with the racketeering mobsters behind the 'illegal' gambling houses now operating with impunity on just about every street corner in our country today. Christie, Davis, Wilchcombe and Maynard-Gibson in particular should be seen as being, for all intents and purposes, agents of the Chinese when it comes to that ruthless foreign government's business and other interests in the Bahamas. It is therefore almost impossible for Sarkis/Baha Mar to get an unbiased fair hearing before any court (judge) in the Bahamas on any matter pertaining to the legal actions they have initiated outside of the Bahamas. Sarkis/Baha Mar and their legal representatives must remain very wary of this fact. Being as dependent as the financially weak Bahamas now is on foreign direct investment from China, the lead legal representatives of Sarkis/Baha Mar in the U.S. and U.K. can expect for the Christie-led PLP government and the Attorney-General of The Bahamas (Allyson Maynard-Gibson) to push very hard for the Bahamian courts to have jurisdiction over the matters under dispute and now the subject of asserted claims. Their efforts to do so must be vigorously thwarted or the Chinese will end up obtaining the home field advantage in the Bahamian court system.
Well_mudda_take_sic 8 years, 10 months ago
And to think the Wicked Witch of the West (Allyson Maynard-Gibson) had the gall while serving as Attorney-General to be instrumental in nominating herself to receive the Q.C. designation with the blessing of Christie as PM. What a joke! The fact that no public objection and rejection of this foolishness was voiced by any other Bahamian Q.C. says it all about the very serious shortcomings of the legal/justice system in the Bahamas today. It seems the most senior lawyers in our country are quite content, by their very silence, to standby and bear witness to the destruction of our country's legal framework and judiciary fabric notwithstanding the serious toll being taken on their own professional stature in the eyes of Bahamians and the world at large. What a pity!
Sign in to comment
Or login with:
OpenID