The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

China Construction (America’s) Bahamian subsidiary urged at least one sub-contractor to join forces with it against Baha Mar, and develop “a co-ordinated presentation of claims” against the embattled developer.

Tiger Wu, CCA (Bahamas) president, in the midst of a $754,704 payments battle, told its US demolition company adversary that it wanted the two sides to develop a strategy for obtaining “payment of undisputed and disputed sums from Baha Mar”.

Mr Wu’s offer, made around one month after Baha Mar’s Chapter 11 bankruptcy protection filing in late June 2015, was not taken up by Controlled Demolition Incorporated’s (CDI) president, Mark Loizeaux.

CDI’s lawsuit against CCA (Bahamas) to recover the alleged outstanding payment due to it remains live, but Mr Wu’s July 27 letter to Mr Loizeaux illustrates how anxious the Chinese contractor was to pin blame for the project’s payment difficulties on Baha Mar and its developer, Sarkis Izmirlian.

CDI, in its lawsuit, alleges that CCA has adopted numerous ‘stonewalling’ tactics in a bid to defeat its claim - one being that Baha Mar was not satisfied with its demolition work on the former Nassau Beach Resort and two Wyndham towers.

Mr Wu’s July 27 letter, though, is a ‘full frontal’ effort to blame the non-payment on Baha Mar, as he seeks CDI’s collusion in demanding monies from the developer.

“CCA shares CDI’s distress over the fact that the project owner, Baha Mar, has failed and refused to pay legitimate sums for work performed and retainage,” Mr Wu wrote, suggesting that formal dispute proceedings between CCA and its unpaid sub-contractors was in no one’s interests.

“Instead, we should confer over a co-ordinated presentation of claims against Baha Mar when the opportunity arises,” Mr Wu wrote. “Certainly, CCA is exploring every potential opportunity to recover the hundreds of millions of dollars owed by Baha Mar.”

He repeated this offer later in the letter, adding: “We are certainly willing to discuss a co-ordinated strategy to obtain payment of undisputed and disputed sums from Baha Mar.”

Mr Wu sought to dissuade CDI from seeking Dispute Resolution Board (DRB) arbitration over their payments dispute, arguing that the Chapter 11 filing prevented such actions.

He then sought to pin the blame for non-payment on Baha Mar, arguing that the sums owed to CDI were largely the responsibility of the developer.

“These contentions implicate amounts payable by Baha Mar to CCA that Baha Mar has not paid,” Mr Wu said.

“The clear consequence is that CCA is not obligated to pay CDL any amount that Baha Mar is obligated to pay to CCA, unless and until Baha Mar has paid that amount to CCA. Because Baha Mar has not paid the sums claimed by CDI to CCA, CCA has no obligation to pay them to CDI.”

CCA has claimed that Baha Mar owes it between $130-$140 million, although the developer has pegged this figure at nearer $75 million.

Mr Wu’s letter said Baha Mar had not only refused to pay these sums, but “at least in part” was disputing that they were due at all.

“In the case of retainage, Baha Mar has disputed that all of the claimed work has been performed and has contended that retained sums are not yet payable,” he wrote.

“Moreover, Baha Mar has taken the position that the claimed amounts have not been earned.”