By NEIL HARTNELL
Tribune Business Editor
A senior Chamber executive yesterday warned that “the options are running out” for a speedy resolution to the $3.5 billion Baha Mar dispute, with the project facing “great jeopardy” if the warring factions are unable to agree terms.
Edison Sumner, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chief executive, reiterated his “fear” that the developer would be unable to reach a compromise with its Chinese partners prior to the November 2 winding-up hearing before the Supreme Court.
Expressing concern that placing Baha Mar into full court-supervised liquidation would benefit no one, especially its principal, Sarkis Izmirlian, the BCCEC chief said the Chamber’s offer to faclitate international mediation/arbitration assistance remained open.
Speaking after a meeting with Baha Mar’s joint provisional liquidators, Mr Sumner said a quick decision was required if they, the Supreme Court and the parties to the Baha Mar dispute decided to employ the services offered by the International Chamber of Commerce (ICC) and its International Court of Arbitration (ICA) affiliate.
He added that Mr Izmirlian, China Construction America (CCA) and the China Export-Import Bank now had “a very tight window” of 46 days in which to negotiate a commercial, out-of-court settlement prior to the scheduled winding-up hearing.
Expressing confidence in the ability of the joint provisional liquidators, Bahamian accountant Ed Rahming and his two colleagues from UK-based AlixPartners, to fulfill the mandate set by the Supreme Court, Mr Sumner said they were “not operating in a silo”.
While charged by Justice Ian Winder to effectively act as mediators/arbitrators themselves, and attempt to get the Baha Mar parties to the negotiating table to resolve the dispute, Mr Sumner said their efforts depended on the co-operation and goodwill of both Mr Izmirlian and the Chinese.
“My fear is that if this goes back to court in November, and there is no compromise between all the parties concerned, that hearing will not be beneficial, especially to the developer,” he told Tribune Business.
“The options are running out. It’s important for them to come to some compromise very soon. Otherwise, if this goes any further and there is no agreement for settlement or compromise, we can see this entire development put into great jeopardy. Everyone wants to avoid that happening.”
Should Justice Winder rule in favour of placing Baha Mar into full liquidation, Mr Izmirlian’s ousting from the $3.5 billion project will be complete, potentially costing his family their entire $850-$900 million equity investment.
The (now full) liquidators would then be tasked with restructuring the project, either working with both China Construction America (CCA) and China Export-Import Bank to finance its completion and open the $3.5 billion resort complex.
With the bank heading the claimants queue as Baha Mar’s $2.45 billion secured creditor, it would have the option of taking over Baha Mar’s ownership and finding new management/operators for the hotel.
Or it could ask Mr Rahming and his team to seek a buyer for Baha Mar. Either solution would likely take months, and probably years, to effecft, hence the preference of Mr Sumner and others for a negotiated commercial settlement in the one-and-a-half months before November 2.
Mr Sumner yesterday even suggested that Baha Mar and CCA ‘park’ their dispute in favour of getting the $3.5 billion project completed and open.
“If they have to take their matter back to court at a later date, fine, but let’s move to the point of getting the resort completed and open, and people back to work so we can all enjoys this project,” the BCCEC chief executive added.
Expressing hope the the Baha Mar impasse would be resolved before the international rating agencies again assessed the Bahamas’ sovereign creditworthiness, Mr Sumner agreed that Mr Rahming and his UK colleagues were now “critical to the process” of resolution.
“At least we have a group in there, through the joint provisional liquidators, who have the capacity to provide that level of mediation, but there has to be a level of co-operation from all parties concerned if there’s to be any benefits from the process,” Mr Sumner said.
“We have confidence in the ability of the joint provisional liquidators to get the jobs done, but they’re not operating in a silo. They have to get the full co-operation of all parties concerned.
“If that is not the case, we’d encourage everyone - the joint provisional liquidators and others - if they see the need, to bring in additional arbitrators to get the job done.”
Mr Sumner said the Supreme Court and joint provisional liquidators would need to decide quickly if outside help was required, as there was “a very tight window” in which to reach a settlement before the November 2 hearing.
“A decision to engage someone else in the process has to be made soon, otherwise any assistance needed might not be in time before the next court hearing,” he told Tribune Business.