The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar’s receivers and liquidators have left “no stone unturned” in their hunt for assets, quietly transferring a second tranche to the project’s secured creditor in December 2016.

A January 17, 2017, letter issued to Baha Mar’s few remaining creditors, plus suppliers and vendors, reveals that 17 further companies in the structure set up by original developer, Sarkis Izmirlian, have now been placed into liquidation.

The letter, written by the three joint liquidators, including Bahamian accountant Ed Rahming, discloses that these entities’ assets - given a “net book value” of $185,000 - were transferred to the China Export-Import Bank’s special purpose vehicle (SPV), Perfect Luck Holdings, last month.

These assets, largely a mixture of receivables, cash and prepayments, joined Baha Mar’s resort and real estate holdings, which had already been placed in Perfect Luck Holdings’ care on September 23, 2016, as part of the two-phased sales process.

They will now likely be included in Baha Mar’s sale to its new owner, Hong Kong-based Chow Tai Fook Enterprises (CTFE), which is acquiring the project’s assets from the bank and Perfect Luck Holdings in a deal that has yet to fully close.

Describing the 17 new entities that have come under their control, the liquidators wrote in their letter: “The companies were established for the purposes of trading the Baha Mar resort once construction had been completed and the resort opened.

“As the resort had not opened, the companies had not commenced trading, and therefore they held limited assets. The assets across the companies comprised of an investment in a dormant American entity, small cash balances, prepayments, receivables from the [companies controlled by the bank’s Deloitte & Touche receivers], and an interest in a vehicle which would be used to provide services to guests of the resort.

“Excluding the balances due from the receiver-controlled companies (which are irrecoverable due to the official liquidation), and the dormant entity (which is heavily insolvent), these assets total approximately $185,000 at net book value across the companies.”

Seemingly anxious to ensure that nothing of value was missed, the Deloitte & Touche receivers, acting as the China Export-Import Bank’s agents, sought approval from the Supreme Court in December 2016 to transfer a further batch of Baha Mar assets to the Perfect Luck SPV.

“At that stage, they also requested approval for a related entity to purchase the prepayments, receivables and vehicle of the [17 companies],” wrote Mr Rahming and his UK-based colleagues.

“These requests were approved by the court, pending the appointment of the liquidators over the companies.”

The second asset transfer to Perfect Luck Holdings was completed on December 13, 2016, further paving the way for the China Export-Import Bank to consummate the sale to CTFE.

Pointing out that the 17 companies were all insolvent, the liquidators wrote: “The only remaining asset of the companies to realise is cash at bank, and the liquidators are currently in the process of gaining control of the funds.

“It is uncertain whether there will be any funds in each of the companies available for distribution to the unsecured creditors of each respective company.”

Mr Rahming confirmed to Tribune Business that all 17 entities are now being placed into liquidation and formally wound-up, with the liquidators estimating that the process will likely take four weeks.

“We’re going through the statutory steps, making sure all the corporate entities that fell under the previous structure are dissolved, and every single asset, every single liability, is accounted for, with the creditors aware of everything,” he explained.

“You can call it tidying up work. We’re turning over all the stones, making sure we cover all the entities. We’re going through the entire corporate structure straight up, going through the companies we have control of and putting them into liquidation, first voluntary, then official.”

Raymond Winder, Deloitte & Touche (Bahamas) managing partner, and one of the project’s three receivers, told Tribune Business that “nothing of significance” was included in the second asset transfer.

“Most of it was intangible assets, sales, receivables,” he said. “The big stuff; the real estate was moved in the first tranche. This was the small stuff; whatever hadn’t been transferred in the first tranche.”

Mr Rahming and his Alix Partners colleagues, Nicholas Cropper and Alastair Beveridge, had already been upgraded from provisional to full liquidators of the seven former Baha Mar companies taken over by the receivers in late 2015. For dissolving the 17 companies, the two UK accountants are charging $1,015 per hour.

Of the new 17 entities placed into their care, just two - Baha Mar Operating Company Ltd and Baha Mar Entertainment Ltd - were among the seven already inherited from the receivers after they had outlived their usefulness in facilitating the first asset switch to Perfect Luck.

The new 15 are: Baha Mar Operating Company Ltd, Baha Mar EA Services Company Ltd, Blue Egret Ltd, Blue Flamingo Ltd, Blue Ibis Ltd, Blue Kingfisher Ltd, Blue Pelican Ltd, Baha Mar SPA Services Company Ltd, Baha Mar Leasing Company Ltd, Baha Mar Support Services Ltd, Baha Mar CHC Ltd, Baha Mar Convention Hotel Company Ltd, Baha Mar Lifestyle Hotel Company Ltd, Baha Mar Luxury Hotel Company Ltd, Baha Mar Sales Company Ltd, Baha Mar Convention Center Company Ltd, Baha Mar Entertainment Ltd.