By AVA TURNQUEST
Tribune Chief Reporter
A DAY after former Prime Minister Hubert Ingraham called the Christie administration’s push to have Baha Mar liquidated a bad move, the government hit back saying provisional liquidation “was the only sensible option available”.
Yesterday, Progressive Liberal Party Chairman Bradley Roberts also fired back at Mr Ingraham over his criticism of the government’s handling of Baha Mar, branding his comments as dangerous to the country’s sovereignty.
A statement released by the government last night said its actions were taken to reduce “harm to the Bahamian economy and Baha Mar’s Bahamian employees and other creditors.”
“Any suggestion to the contrary demonstrates a lack of awareness of the facts surrounding Baha Mar’s insolvency,” the government’s statement added.
“Recent press accounts critical of the government’s decision suggest that the government should have committed $100 million in taxpayer funds to supplement financing ostensibly available from Baha Mar’s construction lender, the Export-Import Bank of China (CEXIM) and its developer, Sarkis Izmirlian. This criticism ignores a critical fact: provisional liquidation of the Baha Mar companies was the only realistic choice following their surprise Chapter 11 bankruptcy filing in Delaware in late June 2015. The developer himself, in the US bankruptcy proceedings, made clear he had no money to complete the project and that he had every intention of downsizing.”
During a rare interview on Tuesday at his law office, Mr Ingraham said the government was “dead wrong” to petition the Supreme Court to place the resort into provisional liquidation, instead of letting the developer’s Chapter 11 bankruptcy filing play out in a US court.
He also said the government had experience in such matters, drawing parallels to the sale of property on Paradise Island in the early 1990s.
“The government was dead wrong to put Baha Mar in liquidation,” Mr Ingraham stressed. “It made a big mistake when it said that it was against the sovereign interest of the Bahamas for Baha Mar to go into Chapter 11 in the United States. We’ve had that experience before, (the former) Resorts International - Paradise Island - was in Chapter 11 in America when Mr Pindling was prime minister and when Christie was a minister.”
He also said the government “tilted in favour” of the Chinese interests associated with the project.
During a separate interview, Mr Ingraham told reporters he advised the prime minister that “it would have made sense” for the government to provide $100 million to the project to keep it afloat.
Yesterday, the government stressed that the Chapter 11 proceedings would have “prolonged the developer’s control of the Baha Mar project (at the cost of tens of millions of dollars of professional fees); but it could not possibly have changed the outcome for Baha Mar, except for the worse.”
“By commencing winding-up proceedings and moving for appointment of provisional liquidators, the government preserved the possibility of a negotiated resolution, while assuring that the fate of the Baha Mar resort and the claims of its creditors would be determined in The Bahamas - not in a bankruptcy court in Delaware. This measure, among other things, saved Bahamian unsecured creditors the cost of pursuing their claims in the US.”
And on Mr Ingraham’s comparison of the Baha Mar matter to issues related to Paradise Island in the early 1990s, the government said: “The Baha Mar proceedings differed sharply from the two Resorts International bankruptcies. The properties on Paradise Island controlled by Resorts International were part of a much larger enterprise that included casinos in Atlantic City, New Jersey. “The Resorts International bankruptcies affected holding companies and their creditors and led to the sale of the Paradise Island properties to Sol Kerzner; but they did not jeopardize the Bahamian economy or the interests of Bahamian employees or other creditors. By contrast, the Baha Mar project constituted virtually the only material asset of any of the Baha Mar companies (whose connections with the United States, let alone the State of Delaware, were minimal), while the Baha Mar companies’ bankruptcy threated to harm, and has gravely harmed, the Bahamian economy and Baha Mar’s Bahamian employees and creditors.”
In his statement, Mr Roberts claimed that Mr Ingraham’s comments set a dangerous precedent and stood to undermine the sovereignty of the country if the FNM is elected to govern.
“Former Prime Minister Hubert Ingraham’s ill-advised comments on the Baha Mar bankruptcy process prove yet again that failing to stand up for Bahamians and the sovereignty of The Bahamas must be endemic in the FNM,” he said.
“When faced with the decision to stand up for The Bahamas, the leadership of the FNM always waffles and struggles on this score. The decision of the Christie administration to oppose the subjugation of our sovereign jurisdiction to a foreign one, reducing our judiciary to a rubber stamp was a matter of sovereignty and we stand behind the government on this policy decision.”
He challenged the former prime minister to provide details on other matters of national intrigue, such as the contentious sale of BTC to Cable and Wireless, the international bribery scandal that led to the conviction of a former Bahamas Electricity Corporation board member, and the findings of the NIB forensic audit.
He added: “Not only is Ingraham failing to stand up for the Bahamas, his record of governance and his terrible policy decisions do not cause for real progress, but have set this country back many years.”