The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government will today seek a further adjournment of its Baha Mar winding-up petition from the Supreme Court, with the next hearing likely to be pushed back to September 2016.

Tribune Business sources familiar with developments told this newspaper that the Attorney General’s Office would justify the adjournment by arguing that all parties needed to see how the ongoing sales process works out.

Speaking on condition of anonymity, because they were not authorised to speak to the media, one contact said all parties to the Baha Mar impasse were scheduled to be back before Justice Ian Winder at 10am.

The Supreme Court is due to hear the petition brought by several government agencies, such as the National Insurance Board (NIB) and Gaming Board, to formally wind-up Baha Mar and place it into formal liquidation as a result of its inability to pay its debts.

However, the Government has sought two previous adjournments of its winding-up petition, and today is likely to be no different.

Tribune Business understands that the Attorney General’s Office has already circulated a letter to Baha Mar’s creditors, including China Export-Import Bank and China Construction America (CCA), explaining the rationale for requesting a further hearing delay.

“The Government sent around something requesting an adjournment to September to give them time to let the sales process play out, and see what the results are,” one source said. “Hopefully, they’ll have something positive to report to the court.

“The latter sought the input of the various stakeholders and gave reasons as to why it made sense. It’s a request to the various parties, and once they agree, it’s a request to the court.”

This account was confirmed by other sources close to Baha Mar developments, with one saying: “I know they’re [the Government] seeking to adjourn it in light of the sales process going on.”

Another added: “They will be seeking an adjournment to the hearing of the petition. I think they’re seeking an adjournment to give the process an opportunity to review the bids, or various potential bids, that come forward.”

Such an outcome, if approved by the Supreme Court, will leave the joint provisional liquidation team of Bahamian accountant, Ed Rahming, and his two UK counterparts, Nicholas Cropper and Alastair Beveridge, in place.

However, they have no power and, more importantly, no funding to perform their tasks and duties. Although appointed by the Supreme Court last September, they now play a secondary role to the Deloitte & Touche receivership team.

It is the latter who are managing the sales process for the $3.5 billion project, having been appointed by Baha Mar’s $2.45 billion secured creditor, the China Export-Import Bank, and approved by the Supreme Court.

Several observers have privately suggested to Tribune Business that if the Government wanted to speed up a Baha Mar resolution, it should press ahead with the winding-up petition and provide proper funding to the joint provisional liquidators - whom it pushed to appoint in the first place.

The suspicion remains that Mr Rahming and his UK colleagues were used to do ‘the dirty work’ in terminating some 2,000 Baha Mar employees, and then were required to step aside for the Chinese bank and its receivers, who were able to start with a so-called ‘clean slate’.

The sales process has also been marred by a row between Baha Mar’s original developer, Sarkis Izmirlian, and the receivers, with the claiming it has been structured with onerous terms and conditions that make it impossible for him to bid.

The Deloitte & Touche team has thus far deliberately avoided responding to Mr Izmirlian and his team publicly, and appear to have adopted the Chinese approach of cold-shouldering and ignoring him.

Meanwhile, Tribune Business sources said the Supreme Court was also due to hear today Mr Izmirlian’s petition that it approve a process whereby Baha Mar’s $192 million claim against its contractor can be pursued in the UK High Court without the involvement of Baha Mar’s financiers or Deloitte & Touche.

Mr Izmirlian and his Granite Ventures vehicle have provided the court with two options they claim will result in ‘monetising’ the value of Baha Mar’s claim against its contractor for the benefit of all creditors, including itself.

Granite Ventures is seeking an Order that will place “custody and control” of the action against China State Construction Engineering Corporation (CSCEC), CCA’s parent, into the hands of either a Baha Mar creditors’ committee or the joint provisional liquidators

The $192 million claim against CSCEC seeks to enforce its May 12, 2011, guarantee that China Construction America (CCA), its subsidiary, would perform all necessary obligations under the terms of its Baha Mar construction contract.

The action was filed in the UK High Court on June 30, 2015, one day after Baha Mar sought Chapter 11 bankruptcy protection - a move that was ultimately defeated in the Bahamian and Delaware Courts.