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‘Options Running Out’ Rapidly On Baha Mar

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

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.

Comments

Well_mudda_take_sic 5 years ago

Christie has every reason to be happy. At the end of the day the Chinese, on a net basis, have no more invested in Baha Mar than the Izmirlian family, perhaps the equivalent of USD 1 billion at most. Monies from the credit facilities extended by China EXIM Bank went into the pockets of the Chinese construction company, the Chinese sub-contractors and all of their Chinese workers involved with the project. The conflict of interest in having Chinese financing married with Chinese construction/labour all but assured profits for the China state controlled enterprises would be padded as much as possible by the cutting of corners at the work site, which no doubt has resulted in hidden poor quality workmanship throughout the project that will cost hundreds of millions of dollars to fix. A full blown costly investigation by non-Chinese engineers would need to be done to reveal all of the serious shortcomings in the quality of the Chinese workmanship that has no doubt left the project's structures unsafe in many respects. The Chinese obviously put monies in other non-Chinese Bahamian pockets (and I'm not just talking about local Bahamian contractors!) in order to bring things to the failed state where they are today, leaving many poor Bahamians and Bahamian taxpayers left holding the proverbial empty bag. It's all about seeing the bigger picture.......a massive screwing of the Bahamian people by the Chinese crawling into bed with our greedy corrupt dimwitted politicians (in the same way they have done throughout much of Africa....starting with a stadium)......and we Bahamians all know the ones at the top of that very greedy list of self anointed political elite in our country who could not care less about the Bahamians who foolishly voted them into office!

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digimagination 5 years ago

The brilliance of democracy, in the end you blame the voters!

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