The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Attorneys representing creditors of the sole Baha Mar company still in Chapter 11 bankruptcy protection are demanding that Sarkis Izmirlian pay them almost $300,000 to cover their legal fees and expenses.

Otherwise, warns Lawrence Gottlieb in a November 10, 2015, letter, the US lawyers for Baha Mar’s unsecured creditors committee will “take action to compel such payment” in the Delaware Bankruptcy Court.

Mr Gottlieb’s law firm, Cooley, and Whiteford, Taylor & Preston, are both acting for the committee in the ongoing Chapter case involving Northshore Mainland Services, the only US-domiciled Baha Mar company.

While the Delaware Bankruptcy Court dismissed the bankruptcy protection for all Baha Mar’s 14 Bahamian-domiciled companies on September 15, it allowed Northshore to remain in Chapter 11 - partly hoping it could act as a vehicle for the $3.5 billion project’s restructuring.

While the near-$300,000 legal bill pales into insignificance alongside his $850 million equity investment in Baha Mar, and multi-million costs incurred in the Chapter 11 process and unsuccessful fight to retain control of the project, the letter may give an insight into Mr Izmirlian’s ‘state of mind’.

For it suggests, having been removed from the development by the China Export-Import Bank’s appointment of Deloitte & Touche as receivers, Mr Izmirlian has decided to cut his losses and let Baha Mar ‘go’.

Prime Minister Perry Christie had previously expressed concern that Mr Izmirlian would do this but, ever mindful of the family’s wealth, the latter will simply not ‘throw good money after bad’. Hence the alleged non-payment of legal fees.

Mr Gottlieb, in what is effectively a ‘demand’ letter, tells Mr Izmirlian: “I request that you cause the debtor [Northshore] to immediately pay all amounts due and payable to the firms.

“If you fail to do so, the firms will take action to compel such payment, which may include seeking relief in the Bankruptcy Court, seeking relief from you, individual directors and/or officers of the debtor and the former debtor entities, and/or seeking disgorgement from the professionals that have been paid by the debtors.”

Mr Gottlieb said his firm had been selected as the attorney for Baha Mar’s unsecured creditors committee on July 14, 2015, with Whiteford acting as its Delaware attorneys. Their appointments were ratified by the Bankruptcy Court three days’ later.

However, Mr Gottlieb alleged that Northshore (Baha Mar and Mr Izmirlian) had left outstanding payments on Cooley’s fees from the get-go. Some $77,060 is owed for July, he claimed, and $132,718 for August.

These balances, Mr Gottlieb alleged, represented 80 per cent of the fees, and 100 per cent of the expenses, due to his law firm. The remaining 20 per cent of fees are to be invoiced later.

As for Whiteford, Taylor & Preston, Mr Gottlieb alleged that it, too, was owed 80 per cent of its fees and 100 per cent of its expenses for July and August.

These sums amounted to $38,349 and $48,668, respectively, taking Northshore’s total outstanding legal bill to around $296,000.

“I note that the Debtor’s [Northshore’s] monthly operating reports indicate that the debtor has paid various other professionals, including certain professionals whose retentions have not been approved by the Bankruptcy Court, and other professionals who have not yet filed fee statements as required by the procedures established by the Bankruptcy Court,” Mr Gottlieb told Mr Izmirlian, via a letter that was sent through Tom Dunlap, Baha Mar’s president.

“I expect that the fees and expenses incurred by the firms – which have been properly retained and which have filed fee statements as to which there has been no objection – be paid forthwith.”