The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s “conflict of interest” over the $200 million British Colonial Hilton expansion meant it should never have attempted to act as an impartial mediator in the Baha Mar dispute.

Branville McCartney, the Democratic National Alliance’s (DNA) leader, told Tribune Business that the Christie administration had been courting and approving China Construction America’s (CCA) ‘The Pointe’ project simultaneously with seeking to resolve Baha Mar’s woes.

Suggesting that this amounted to a ‘conflict’ that should have disqualified the Government from attempting to act as ‘impartial mediator’, Mr McCartney said Friday’s Supreme Court ruling had left a solution for Baha Mar “still at first base”.

He added that Justice Ian Winder’s decision to appoint joint provisional liquidators, albeit with limited powers, had done nothing to ease the uncertainty for some 2,400 Baha Mar employees over medium and long-term job security.

And the DNA leader argued that Friday’s Supreme Court ruling would not alleviate the plight of Bahamian contractors, owed multi-million dollar sums for months, or local businesses who were retail and restaurant tenants at Baha Mar.

Mr McCartney said that even if the Government agencies’ winding-up petitions were ultimately approved by Justice Winder on November 2, it would take months - even years - for the provisional liquidators to find a buyer for Baha Mar should it become necessary.

Suggesting that resolution seemed to have been further delayed, the DNA leader said it was impossible for the Government to be perceived as an ‘honest broker’ in the dispute.

Besides its actions post-June 29’s Chapter 11 filing, Mr McCartney implied its eagerness to create jobs via foreign direct investment (FDI) meant it would not have wanted to jeopardise CCA’s British Colonial Hilton expansion via an aggressive mediation approach. CCA is that resort’s owner, as well as Baha Mar’s contractor.

“This is the same Government that, in the midst of the dispute with Baha Mar, gave this same construction company the right to develop this new project, The Pointe,” Mr McCartney told Tribune Business.

“This same Government has been in contact with this construction company with regard to this other development for a few years prior to it coming to fruition while, at the same time, talking over another development in dispute.

“I find it difficult for this Government to say that they’re trying to act as a neutral mediator in these Baha Mar negotiations when they’re also trying to do business with one of the parties in another development,” the DNA leader added.

“That’s a conflict, but then this Government is known for being conflicted all around. Mark my words: This will not be resolved until 2017. A new government is going to have to resolve this one.”

Justice Winder on Friday struck-out the Government’s original winding-up petition, claiming that Baha Mar owed it almost $59 million, on the grounds that the move was “grossly irregular”.

He, however, ruled that the $26 million-plus claim by the Bahamas Electricity Corporation (BEC) and petition by the Treasurer were valid and could proceed.

Justice Winder also agreed to appoint Bahamian accountant Ed Rahming, a partner in KRyS Global (Bahamas) as Baha Mar’s joint provisional liquidator with two UK accountants, Mark Cropper and Alastair Beveridge of AlixPartners Services.

Their powers, though, have been limited by Justice Winder to merely preserving and maintaining the $3.5 billion project’s existing assets over the next two months.

Mr McCartney told Tribune Business that Friday’s ruling seemed to have brought the Baha Mar dispute no closer to resolution, especially where the Bahamian employees, contractors and investors were concerned.

“We’re still at first base,” he said. “It seems as if the saga continues. Again, it seems to be another delay. It’s unlikely this will be resolved any time soon.

“There’s probably an option for an appeal by the developer and, if that is the case, that will delay it even more. This is not going to end at this stage.”

The DNA leader continued: “The Government’s so-called strategy to have this resolved in a timely manner has increased the delay in resolution.

“There’s no certainty and determination with respect to the employees. The Government’s action has caused the Bahamian employees to be more uncertain as to their employment.

“And it would seem that businesses are not going to be paid at this stage. And contractors and business persons invested in that development will not be in a position to collect on or know when they’ll be satisfied with monies outstanding.”

The Supreme Court has scheduled the hearing on the Government agencies’ winding-up petition for November 2, meaning that four months will have passed between Baha Mar’s Chapter 11 and the appointment of joint provisional liquidators with full powers (if that is what the court decides).

Mr Rahming, and his UK partners, will then likely need several months to become fully appraised of the development’s condition and ready it for potential sale to another buyer.

Mr McCartney, though, warned that Baha Mar would potentially become the subject of ‘serial litigation’ between the Bahamas, US and UK should a commercial, out-of-court settlement not be reached between the developer and its Chinese partners.

Warning that any sale of Baha Mar would not “happen overnight”, the DNA leader told Tribune Business: “No one will buy this property when these matters are current.

“How are you going to sell this property you have legal filings relating to it in other jurisdictions going on? You are not going to get clean title. Who is going to spend that kind of money on a property, valued at multi-billion dollars, in litigation?”

Mr McCartney said the Baha Mar properties were “not up to code”, and a further investment estimated at between $300-$600 million was necessary to complete construction and eliminate all defects.

He argued that the Government, which had “put all its eggs in the Baha Mar basket”, had “messed up all around” by failing to properly monitor the development and its construction quality.