The Tribune

BRADLEY Roberts, PLP chairman, is incensed that there should be any suggestion that “government interfered with the Baha Mar negotiations, a private contractual matter, and is therefore to blame for the recent lay-offs”.

Mr Roberts said that such a “suggestion is foolish, reckless and irresponsible because it is simply untrue and at odds with the facts that are matters of public record. The blame for the troubles lies at the feet of the developer.”

If Mr Roberts is correct, then there are a lot of foolish and reckless people, not only in The Bahamas, but in the wider world.

On July 17, the day after Prime Minister Christie addressed the nation to provide an update on the state of affairs surrounding the delayed completion and opening of the $3.5bn mega Baha Mar resort, Reuters, a well-respected multi-national news agency, announced: “Bahamas PM seeks control of unfinished $3.5 bln Baha Mar resort.”

Wrote Reuters’ Tim McLaughlin: “Bahamas Prime Minister Perry Christie is moving to take control of an unfinished $3.5 billion mega resort that is weighing down his country’s fragile economy.

“Christie, in a speech Thursday night, called for liquidators to take control of the Baha Mar resort and casino project. A fully operational resort would employ about 5,000 people and boost the Bahamas’ gross domestic product by more than 10 per cent.

“The completion of the Baha Mar resort is a matter of the utmost national importance,” Christie said. “Baha Mar must open.”

Is it any wonder that many investors concluded that nationalisation of private enterprise had taken hold in The Bahamas, at one time an investor’s paradise?

And then five days later, “Casino News” came out with this headline: “Bahamas seeks to wrest control of Baha Mar Casino project from developer”. Another reason to start speculation that free enterprise was dead in The Bahamas and nationalisation had entered by the back door.

This article led with the information that the China Construction America (CCA) told a Delaware bankruptcy judge that it intended to file proceedings to dismiss the bankruptcy proceedings filed in June by Baha Mar. It pointed out that the developer — Sarkis Izmirlian — was suing CCA “over its alleged failure to meet construction timelines”.

Steven Stradbrooke of “Casino News” then wrote:

“Late last week, Bahamas Prime Minister Perry Christie announced that his administration was filing a winding-up petition in the country’s Supreme Court to wrest control over the project from the developer. In a nationally televised address, Christie justified the move by saying that the resort’s completion was ‘a matter of the utmost national importance’.”

Both articles went into great detail, but these quotes from two news agencies —there were many more – are sufficient to illustrate how Mr Christie’s words were being interpreted. In other words, in the eyes of the world, Mr Christie was the man calling the shots. And those shots in international circles had the potential of turning away investors from these once friendly shores.

Continued Mr Bradley Roberts: “Prime Minister Christie was invited by the developer to intervene and facilitate a negotiated settlement. Further, the president of the China Exim Bank also invited the Prime Minister to participate in the three party talks.”

This was true, but much went on before this took place and both sides invited the Prime Minister to intervene. By this time Mr Izmirlian had filed his Chapter 11 bankruptcy petition, to which CCA objected.

That was when negotiations — to which the Prime Minister was invited — started in earnest.

What led up to this was the misinformation being given by CCA, the contracting company, about completion deadlines and opening dates for the hotel. The Baha Mar developer was also dissatisfied with CCA’s finishing work on the project, which was 97 per cent complete. Based on the contractor’s information on opening dates, Baha Mar started an extensive advertising campaign, and was already taking bookings, when at the last minute it had to cancel because CCA failed to meet its opening dates. It ruined the hotel’s reputation before it even had a chance to open its doors. It is reported that there were also financial conflicts between CCA and the developer. Eventually CCA put down its tools and walked off the job.

It is understood that Mr Izmirlian discussed the matter with Prime Minister Christie and made the resort’s tenuous financial position clear to him.

Obviously, it must have been made clear to Mr Christie that drastic and immediate action had to be taken to keep the resort open.

The next announcement was that Mr Izmirlian had filed a Chapter 11 in Delaware to protect his investment, that of his creditors, and the jobs of his staff while he reorganised the business and got it on its feet again.

According to Prime Minister Christie — his statement was published both by Reuters and “Casino News” – these proceedings “are designed to work in very similar terms as a Chapter 11 (bankruptcy), but with the stark difference that they will be controlled by provisional liquidators under the supervision of the Bahamian courts rather than being controlled by Mr Izmirlian.”

By now our readers should know that this statement is not quite true — there is a stark difference between the Delaware procedure and our court. In The Bahamas, the process is liquidation. In Delaware, it is a second chance to save everyone. And in choosing Delaware, Mr Izmirlian had put aside in the region of $80 million to pay his creditors and maintain his staff.

Mr Christie was miffed that Mr Izmirlian had not shared with him his intention to take the Delaware route. Mr Izmirlian’s secrecy was the move of a sharp businessman, because had CCA got wind of his intention it could have immediately blocked the move. This is what CCA tried to do on discovery.

By now our readers should understand the vast difference between bankruptcy in our courts and those of Delaware. They are as different as day is to night.

In his own words, Mr Christie said that going the Delaware route “was objected to by the Bahamas Government, China Eximbank and China State Construction”.

Today we know the results of that objection, so do 2,000 redundant employees.

“In the end both the Delaware and Bahamas Supreme Courts agreed that the matter should be settled under Bahamian law,” claimed Mr Roberts.

It is true that Mr Christie announced that the hearing had to be in the Bahamas Supreme Court. As a result, the Delaware judge made it clear that he was only dismissing it from his court to avoid further dispute in The Bahamas. It was not because he considered it the best option.

In our opinion if Mr Christie, on behalf of the government, had not blocked Delaware, Baha Mar would be in business today and the 2,000 redundancies would not have been necessary.