By NEIL HARTNELL
Tribune Business Editor
Baha Mar’s provisional liquidators have warned the Delaware Bankruptcy Court that they will not submit to its jurisdiction, and that they will challenge the “jurisdiction” of its decisions and Orders over them if necessary.
US attorneys for Bahamian accountant Ed Rahming, a partner in KRyS Global (Bahamas), and his two UK colleagues, Nicholas Cropper and Alastair Beveridge, of AlixPartners Services, warned US Judge Kevin Carey that their clients’ decision to write to him did not mean they were submitting to the Delaware Bankruptcy Court’s jurisdiction.
In what was effectively an ‘introductory courtesy call’ on Judge Carey, who is overseeing Baha Mar’s Chapter 11 bankruptcy protection case, the joint provisional liquidators added that the letter did not “waive” their ability to argue a “lack of personal jurisdiction” defense to any decisions coming from Delaware.
They told Judge Carey that, following their appointment, the Bahamian Supreme Court will likely supervise any Baha Mar “restructuring process” via weekly conferences with them.
The September 11 letter, written two days after the Supreme Court confirmed their appointment, suggests that Mr Rahming and his colleagues have moved swiftly to begin their duties, having already hired US attorneys to represent them.
The letter, written by Bojan Guzina of the Sidley Austin law firm, said: “The provisional liquidators intend to faithfully discharge their duties in accordance with the terms of the [Supreme Court] ruling, the Orders and all applicable laws.
“The provisional liquidators anticipate that Justice [Ian] Winder will hold weekly conferences to supervise the conduct of the provisional liquidators and the progress of the restructuring process.”
Given the size and importance of the $3.5 billion Baha Mart project, Justice Winder’s decision to have weekly conferences is not surprising. The provisional liquidators, as officers of the Supreme Court, are really working for him given that the Bahamian judicial process is now largely in charge of Baha Mar’s fate.
Mr Guzina’s letter sets out what the provisional liquidators see as their key powers, namely their taking control of Baha Mar’s financial and real estate assets. They also pointed out to Judge Carey that they are empowered to conduct Baha Mar’s day-to-day business, and do everything necessary to preserve the value of the project’s assets.
There was no indication in the September 11 letter as to whether the joint provisional liquidators will seek recognition of their appointment by Judge Carey or, indeed, whether they will seek to intervene in the Delaware proceedings.
Mr Rahming and his UK partners must seek Justice Winder’s approval to apply for their recognition by foreign courts, which is something they may seek to do in relation to Baha Mar’s ongoing Chapter 11 bankruptcy protection proceedings.
One of the key reasons behind the Government’s desire to wind-up Baha Mar, and have the Supreme Court appoint provisional liquidators, was the expectation that they would move swiftly to end/withdraw the Chapter 11 proceedings once appointed.
Such a development would end the competition between the Bahamas and Delaware over which has the legal jurisdiction to resolve the Baha Mar dispute. And, more importantly, it would pave the way for both a full winding-up of the developer, should that become necessary, and any action that its secured creditor, the China Export-Import Bank, may wish to take.
However, Mr Rahming and his colleagues warned the Delaware court that they were neither submitting to its jurisdiction nor forfeiting any defenses they may have against it on jurisdictional grounds.
“Please note that the submission of this letter shall not constitute consent by the provisional liquidators to the jurisdiction of the court, or waiver or forfeiture by the provisional liquidators of the right to raise the defense of lack of personal jurisdiction, or any other rights, remedies or defenses in any proceeding before the court or any other tribunal,” Mr Guzina wrote on their behalf.