The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The 2,026 terminated Baha Mar employees will not receive due severance pay and all benefits owed to them, amid increasing uncertainty over the $3.5 billion project’s fate come November 2.

The development’s joint provisional liquidators, in a letter sent to workers yesterday, warned that the project’s insolvency meant they could only pay salaries and benefits due to employees for the period since they were appointed.

This means that the Baha Mar workers being terminated with effect from today will only receive salaries and benefits due to them for the period September 4-October 23.

As a result, they will have to submit claims for severance pay and other Employment Act entitlements, and monies due to them before the joint provisional liquidators were appointed, and stand in the creditors queue with thousands of other businesses and individuals.

Without government intervention, it is unlikely that many of the terminated staff will recover much of what they are owed.

“All employees made redundant will be paid for any outstanding salary, and any benefits you may be eligible for, as relates to the period since the provisional liquidators’ appointment on 4 September, 2015, up to 23 October, 2015,” the joint provisional liquidators’ letter said.

“ The payments of salary for this period will be processed on 26 October, 2015.”

The letter added: “Due to their insolvency, Baha Mar Ltd and Baha Mar Enterprises Ltd are not in a position to pay any amounts which may be due at this time in respect of the period prior to the appointment of the provisional liquidators.

“All payments due to employees other than earned and unpaid salary for the month of October through to 23 October, 2015, will rank as a claim against the company that your employment contract is with.

“Employees are entitled to submit claims, as applicable, for any accrued and unused vacation, pay in lieu of notice, redundancy, earned but unpaid salaries, declared but unpaid bonuses and repatriation expenses. The companies have provided a calculation of the amounts due to you in your termination letter.”

K P Turnquest, the FNM’s deputy leader, suggested to Tribune Business that such a situation required a “review” of the labour laws and their severance pay provisions, given that many workers would “not have the cushion to be able to withstand” the wait for their monies, or legal action to ensure payment.

While many of the more than 2,000 impacted Baha Mar employees are likely to perceive themselves as ‘short changed’, there is also increasing uncertainty over what will happen to the $3.5 billion project come November 2.

The joint provisional liquidation team of Ed Rahming, the Bahamian accountant and partner in KRyS Global (Bahamas), and UK duo, Alastair Beveridge and Nick Cropper, appear unlikely to broker a commercial resolution to the Baha Mar dispute before that date.

There is now just over one week left for an out-of-court settlement before Justice Ian Winder is due to hear the winding-up petitions from various government agencies to place Baha Mar into full liquidation.

However, several Tribune Business sources questioned whether the Government would move ahead, as it had not complied with the statutory provisions of the Winding-Up Act amendment 2011.

It, like all winding-up petitioners, has to advertise the filing of its petition within 14 days of doing so, so other creditors and the subject company are alerted and can respond.

Yet one contact with experience of liquidation processes said the Government had failed to do this, and suggested that it may use this to ‘play for time’ on November 2 and avoid initiating the Baha Mar petition just yet.

Prime Minister Perry Christie last week hinted that the Government may be having ‘second thoughts’ over the liquidation strategy, as he described the November 2 deadline as a “chilling prospect”.

Mr Christie often speaks in riddles and is hard to de-code, but his remarks could be interpreted either as a re-think or call to the three parties - developer Sarkis Izmirlian, the China Export-Import Bank and China Construction (America) - to resolve their differences quickly.

Tribune Business was also told that another possibility, apart from the Supreme Court placing Baha Mar into full liquidation, is that the China Export-Import Bank could seek to appoint its own receiver for the project. It is entitled to do this as the $2.5 billion secured creditor.

The Government was alive to this possibility in its statement last night, as it said: “Whether the process of a negotiated arrangement is achieved or the bank proceeds to receivership in the time remaining before November 2, 2015, when the process of liquidation could be started, the Government is presently engaged in meetings and other dialogue with the relevant stakeholders and the joint provisional liquidators to arrive at the best possible solution which will best serve the national interest.”