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Baha Mar’S Chapter 11 Case Is Thrown Out

Prime Minister Perry Christie

Prime Minister Perry Christie

By KHRISNA VIRGIL

Tribune Staff Reporter

kvirgil@tribunemedia.

THE Delaware Bankruptcy Court’s decision to throw out Baha Mar developer Sarkis Izmirlian’s Chapter 11 bankruptcy case yesterday has validated the government and “disappointed” the Cable Beach resort.

Prime Minister Perry Christie said that the US ruling advances the government’s objective and recognises that the interest of the involved Bahamian entities would be best served in this country.

The effect of US Bankruptcy Judge Kevin Carey’s ruling is to remove the last potential obstacle to the Bahamian Supreme Court and its joint provisional liquidators taking full control over the stalled $3.5bn mega-resort. And Baha Mar CEO Sarkis Izmirlian is faced with a stark choice: either reach a deal with the China Export Import Bank (CEXIM) and China State Construction (CCA) and government on far less favourable terms before the November 2 winding-up petition hearing in Supreme Court, or face losing his family’s $850-$900m equity.

Judge Carey said yesterday that if he were convinced that denying the dismissal motions would have the effect desired by the debtors - bringing CCA, CEXIM and the government back to the bargaining table, he might consider denying the dismissal motions. However, he said the evidence did not reflect this and he was not convinced this would happen “in short order”.

The ruling read: “The Dismissal Motions are denied as to the chapter 11 case of Northshore Mainland Services, Inc and pursuant to Bankruptcy Code 305 (a), the Dismissal Motions are granted, without prejudice as to the Debtor’s remaining chapter 11 cases.”

Northshore is an American affiliate company of Baha Mar which does its business in the US.

In a statement yesterday, Mr Christie said: “The government welcomes the decision today of the Delaware Bankruptcy Court to dismiss the Chapter 11 proceedings against the Bahamian Baha Mar entities. In so doing, the Bankruptcy Court agreed that the future of the Baha Mar resort should be determined in the proceedings in the Supreme Court of the Bahamas, in which Justice Winder has appointed provisional liquidators.

“The government’s primary objective is, and has always been, to see the resort completed, opened and operating as soon as possible. The Delaware Bankruptcy Court’s decision advances that objective and recognises that the interests of the Bahamian Baha Mar entities and their creditors will be best served by the Bahamian proceedings and by negotiations.

“The Government therefore invites all parties to join it in co-operating with the provisional liquidators to bring about a prompt resolution of this matter in the interests of the Bahamian people.” 

However, Baha Mar maintained that the ruling would have no effect on its priority to ensure that the West Bay Street is property completed and opened as successfully as possible. It pledged to work with the Supreme Court-appointed provisional liquidators with a view to resolving the issues which have prevented the resort from opening without delay.

“Baha Mar is disappointed that the motions by China State Construction and The Export-Import Bank of China to vacate Baha Mar’s Chapter 11 process have been granted by the US Court,” a statement from the resort read, “with the exception of the Chapter 11 case of Northshore Mainland Services. Accordingly, Baha Mar will explore its alternatives with respect to today’s Court decision.

“With respect to the decision, we do note that the Court affirmed that it was appropriate for Baha Mar to file for Chapter 11 in the US Court and that the Chapter 11 filings were made in good faith.

“In its ruling, the Court made clear that the Chapter 11 process ‘with all stakeholders participating, under these circumstances, would be an ideal vehicle for the restructuring of this family of related companies with the ultimate goal of finishing a project said to be 97 per cent complete and, upon its exit from Chapter 11, to be in sound financial footing, with appropriate treatment of creditors’.”

Baha Mar had filed for Chapter 11 bankruptcy on June 29 after a series of opening dates had been missed. It had originally planned to open in December 2014 but postponed to the spring, when the resort blamed CCA for a further delay.

Last night, Baha Mar Joint Provisional Liquidators declared that Delaware court’s dismissal of the resort’s Chapter 11 bankruptcy filing would not change their role.

“Our role from the outset has been to protect and preserve Baha Mar’s assets and focus on bringing all parties to the table such that the resort can open,” said Edmund Rahming, Managing Director of KRyS Global, the Bahamas-based firm appointed with UK-based AlixPartners as joint provisional liquidators.

“As we have stated previously, the successful opening of this significant development is in everybody’s interest,” Mr Rahming said. “Therefore we are focussed on our court-appointed obligations rather than on proceedings outside our control.”

The joint provisional liquidators have called their task of sorting through thousands of pages of documents, contracts and communications accumulated over the last decade “massive” and said the Delaware judge’s ruling would not impact their strategy, obligations or goal as assigned by the Bahamian court.

Mr Rahming said “We have been well supported in this thus far thanks to the co-operation of the parties involved. Given the scale and complexity of this situation there is much to be done and we are hopeful that our process continues in the same positive vein.”

Comments

countryfirst 3 years, 8 months ago

This is the beginning of the end for this whole Bahamar deal. Bahamians have been shafted again by this greedy corrupt administration. Until we Bahamians start to empower ourselves through entrepreneurship, education and hard work we will always be going back and forth with these so called anchor projects that only benefit a few while the rest provide cheap labour.

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realfreethinker 3 years, 8 months ago

Well this crew smiling all the way to the bank. Now they don't have to worry about the corruption coming out in open court

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ThisIsOurs 3 years, 8 months ago

His joy may be solely based in the fact that HE and ALLYSON can get their money back. Not even caring whether Bahamar succeeds or not...we shall see, if they're first in the line if creditors then their goal will be clear

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kaytaz 3 years, 8 months ago

Now what Mr. Pm???? What is your plan for the workers at Bahamar.pray tell us please.2500 people that no one seems to care about.what are you going to do about the workers.that is the most important question today.no time to gloat. You started this fiasco now finish it and explain to the workers how this is the best thing for them and thier families.smt

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Bahamian_in_London 3 years, 8 months ago

"The joint provisional liquidators have called their task of sorting through thousands of pages of documents, contracts and communications accumulated over the last decade “massive” "

This is why winding up was a terrible idea if Christie wanted it open as soon as possible.

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MonkeeDoo 3 years, 8 months ago

Bahamian_in_London: This is called Invoice Justification in Advance - Its gonna be a BIG ONE !

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TalRussell 3 years, 8 months ago

Comrades, could this be a direct sign from above that we peoples must return to tourism in our nation of islands, that once catered to those who come from other countries for the pleasure of what was once the simplicity of our lifestyles.
Why are we not using this wonderful opportunity for reexamining in detail, why large scale tourism development projects are fast becoming tourism unfriendly outdated. If not our Bahamaland, there are other places for tourists to want to stay.
Maybe they can work as camouflaged brick and mortar structures but only in spots around the world which must attempt a substitute for healthy and beautiful sunshine water enclosed gardens, provided free of charge throughout Bahamaland, by Mother Nature.

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TruePeople 3 years, 8 months ago

on the real i highly doubt any tourist come here for the bahamian people or the simplicity of our lives. Most want sunshine and beaches, some what to go 'slumming' round fox hill and them place in their bikinis on scooter with a bunch of expensive camera, thinking that the spectacle of poor people is 'real bahamas'.

Go abroad and tell people you from the Bahamas, they gone come back and say you're from Bermuda, or Barbados. They don't even know the difference.

Simple Life, and simple hotel cannot accommodate the millions of tourist who come here, For most Nassau is not as a destination in and of itself, but as an escape from winter, or the stress of their lives abroad...

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banker 3 years, 8 months ago

Sunshine and beaches are not the current wants of tourists. Tourists want the experiential tourism package. They want culture, things to do, fine restaurants, big experiences that they cannot get at home.

The sun, sand, sea paradigm is dead. The lower class tourists from Canada stay at all-inclusives in Cuba or Dominican Republic -- and that is mainly to escape the winter and cold. Those tourists purely for sun in the winter are price shoppers, and the Bahamas is one of the highest price destinations (due to unionization, high energy cost, etc).

The upper middle class tourists look for experience. They like the "Swim with the Dolphins" stuff, but even that is getting old. Most of my Canadian colleagues who are upper middle class, now vacation at a place that is not even on the sea. They are all headed to Mexico to San Miguel de Allende. The climate is warm, it is safe, there is huge amount of culture, shopping at low prices, gourmet restaurants, music, movies, theater, and the population welcomes the snow birds.

The people with money in my client circles, go to the Maldives, Mauritius, or the old standby - Monte Carlo or the south of France.

The reason why One & Only Ocean Club closed for renos, is that they do not offer what the people with money want any more.

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Honestman 3 years, 8 months ago

BREAKING NEWS: BahaMar to open as "The Beijing Palace" sometime in 2017.

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MonkeeDoo 3 years, 8 months ago

Honestman: You think BEFORE MAY 2017 ?

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MonkeeDoo 3 years, 8 months ago

See how relieved PGC looks now that Pandora is back in the box. He ain't even close to rubbin that Pinky ring today.

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marrcus 3 years, 8 months ago

Baha Mar Sues Construction Company In Uk High Court Tribune - July 1st edition..............So? What happens there?

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Sickened 3 years, 8 months ago

I guess the liquidator will decide that continuing the lawsuit in the U.K. is not in Baha Mar's financial interest and can stop the process... thus really screwing Izmirlian's chance of getting any sort of compensation for CC's crap job. The liquidators have the power now.

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Wideawake 3 years, 8 months ago

I do not think the Liquidators have the power to decide to stop the U.K. Court action. If Baha Mar is wrestled away from Izmirilian, the damages awarded by the UK Court would help offset his lost investment and would help his case, if he decides to sue The Bahamas government.

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sheeprunner12 3 years, 8 months ago

If this is the case then we can kiss future serious FDI goodbye ........ this is a classic case of two state governments (Bahamas/China) strong-arming a private investor (Izmirlian) to have their way with his investment ........ others are watching us

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sheeprunner12 3 years, 8 months ago

Who knows where this will go now????????? Perry ...... this situation is FAR from over .......... I doubt if Izzie will lay down and play dead so you and your greedy crooked cronies can party it up in a hotel complex that he has invested $900 million .......... wipe the smug smile off your face - you haven't won yet

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MonkeeDoo 3 years, 8 months ago

sheeprunner12: Baha Mar was the first choice for the PLP convention. Then they settled for Melia. Ask Big Bad Brad if they going to pay when its over. Would be the first time methinks !

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BaronInvest 3 years, 8 months ago

On 97% completion you'll change the management so you'll work through each percent and it's documentation to understand what you are dealing with in order to get the last 3% done. Any CEO of any company would get straight fired only suggesting that - yet here they are already doing it on a 3.5b$ project - unbelievable ...

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John 3 years, 8 months ago

so nah dey tryn ta say kevin carey is perry christie cousin and the next family reunion pose ta be in key west if bah mar ainn finish by den..i say by dam.

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nicova 3 years, 8 months ago

Great post, I would recommend everyone to read it, keep on posting things like this

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