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Sarkis Scores Court Victory: Cca Loses Bid To Stop Us Legal Action

Baha Mar's original developer Sarkis Izmirlian.

Baha Mar's original developer Sarkis Izmirlian.

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar's original developer yesterday won a second legal victory against the project's main contractor to reignite his $2.25bn fraud and breach of contract lawsuit.

The New York State Supreme Court's appeals court, in a short but pointed verdict, dismissed China Construction America's (CCA) bid to have Sarkis Izmirlian's claim against it either thrown out or sent into arbitration proceedings.

And it also removed the temporary "stay", or injunction, that had been imposed on Mr Izmrilian's lawsuit to allow CCA's appeal to be heard. As a result, all obstacles to the progress of his legal action have now been removed.

"Upon reading.... the papers with respect to the motion [CCA appeal], and due deliberation having been had thereon, it is ordered that the motion is denied and the interim stay granted by an order of a Justice of this court, dated February 13, 2019, is hereby vacated," the New York appeals court confirmed.

No reasons for the court's decision were given, but the significance of yesterday's decision lies in the fact it effectively gives renewed impetus to Mr Izmirlian's lawsuit and restarts the legal process associated with it.

The outcome means that CCA will now have to file a defence to Mr Izmirlian's claims, which it had managed to put off doing by filing its appeal. Both sides will also now have to go through the judicial "discovery" process where they are required to exchange documents, and subpoena/interview witnesses, relevant to their respective cases.

This, in theory, could result in the production of papers that shed light on both CCA and Christie administration decision-making during Baha Mar's Chapter 11 bankruptcy case, and subsequent receivership, liquidation and sale, and the nature of contacts between the two parties as they worked to remove Mr Izmirlian and complete the $4.2bn mega resort.

Some observers were yesterday even speculating that former Christie government ministers may be called to give evidence as witnesses by both sides should the matter get to trial, although both trial and the prospect of this happening are still some way off.

CCA had originally been due to file its defence to Mr Izmirlian's action on February 26, 2019, and start the discovery process a day later, so the only effect of its failed appeal has been to delay this by just over one month.

The New York Appeals Court's ruling also ensures that Mr Izmirlian's claim will continue to be heard in a forum that is open to the public, namely the state court system, rather than being pushed into the closed setting of arbitration.

CCA, which owns downtown Nassau’s British Colonial Hilton and the adjacent Pointe project, dislikes the publicity associated with events it is anxious to put behind it. This was previously revealed in transcripts filed with the New York State Supreme Court where its attorneys expressed the company’s displeasure at continued coverage by Tribune Business.

Had the New York Appeals Court ruled in favour of the Chinese state-owned contractor's arbitration bid, Mr Izmirlian’s case would have been transferred out of the court and into mediation/dispute resolution hearings that are typically held behind closed doors and thus more private. Few to no details are made public.

Mr Izmirlian and his family lost their entire $845m equity investment in Baha Mar, along with “expected future profits”, after the project’s secured financier, the China Export-Import Bank, took possession of the mega resort and ultimately sold it to current owner, Chow Tai Fook Enterprises (CTFE).

With the March 27, 2015, completion deadline missed, and the two sides further apart than ever, Baha Mar filed for Chapter 11 bankruptcy protection at end-June 2015. This was ultimately dismissed to be followed by Baha Mar being placed into liquidation and receivership, from where the China Export-Import Bank and its agents ensured its ultimate sale to CTFE.

In the initial New York State Supreme Court verdict, trial judge Saliann Scarpulla ruled that Mr Izmirlian’s BML Properties could use the investors’ agreement with CCA to invoke New York as the appropriate location to resolve their legal disputes.

She found that there was nothing that bound Baha Mar’s original developer to arbitration, and rejected CCA’s argument that Mr Izmirlian and BML Properties could not bring “direct claims for a loss in the value of [their] equity investment as the loss simply reflects damages incurred by the company (Baha Mar)”.

Justice Scarpulla said an action could be brought where one shareholder suffered a disproportionate loss in comparison to others, noting that a CCA affiliate held $150m worth of preference shares in the Baha Mar project.

The New York court also found that the original Baha Mar developer had provided enough evidence to “sufficiently plead” fraud thanks to the numerous e-mails, documents and meetings referenced. It also rejected CCA’s argument that the fraud claims duplicated the breach of contract allegation.

Comments

Well_mudda_take_sic 9 months, 3 weeks ago

Looks like Vomit Christie, the Wicked Witch of The West (Allyson Maynard-Gibson), Baltron "Bag Man" Bethel, and others like them will get 'their' day in court .... a U.S. court. It can't happen soon enough. LMAO

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John 9 months, 3 weeks ago

You are such a dumba$$. The lawsuit is between Izmirilian and CCA. The claim is for breach of contract and fraud. Doubtful that these claims involve any of those you mentioned and less likely that any will even be summoned as witnesses. Except when Izmirlilian went to the then PM, Perry Christie, and tried to tell him what the Chinese were doing to him and Christie’s response publicly was ‘look like dat man losing he head.’ They may not even have to examine the details of Izmirilian filing for details and Perry and Maynard dem hijacked and sabotaged that effort. All to the advantage of the Chinese.

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Well_mudda_take_sic 9 months, 3 weeks ago

They were instrumental in facilitating the acquisition of the Baha Mar property by the Red China controlled enterprises involved with its development and financing. You can be rest assured they will all eventually be either forced to testify in open court or give very public depositions; hence my very deliberate use of apostrophes around the word 'their'. Nothing will be sealed and kept away from the public eye this next time around. LMAO

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John 9 months, 3 weeks ago

Izmirilian’s claims are for ‘fraud ‘ and ‘breech of contract.’ Christie’s and others involvements were after the fact. The court only needs two questions answered : 1: was fraud committed by CCA? They have indicated that ‘evidence of fraud is well documented in emails...’. And (2). Did CCA breach its contract st Bah Mar? Again every Bahamian knows about the numerous delays in Bah Mar’s opening stemming several years due to the property being (as) incomplete and (b) works not being up to standard. So if Izmirilian can prove these two points and also that the delays and sub par work was CCA’s fault then the case is his to win. O and also that as a shareholder he suffered losses due to CCA’s actions. And this is where the court may offer punitive damages equal to a percentage of Bah Mar’s current earnings. Christie’s, dem lil song and dance may not even illicit a sidebar because they are not parties to the lawsuit. And those actions were all AFTER THE FACT!

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Well_mudda_take_sic 9 months, 3 weeks ago

What part of the phrase "instrumental in facilitating" do you not understand? You clearly believe there was no conspiracy to defraud for self-gain on the part of certain members of our then political elite. That's your opinion and you're obviously entitled to it. Most of us can't wait to find out what unfolds in the U.S. courts in a very public way.

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BMW 9 months, 3 weeks ago

Hope all your plp crooks gotta go to NY. LMAO

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John 9 months, 3 weeks ago

As was predicted!!! And at this point, based on the US legal system, CCA should be preparing to pay out big bucks, even if they can pull a rabbit out of the hat at the last minute. And the relief Sarkis gets will be determined mostly by how skillfully and convincingly his legal team can present his case to the courts. And since emails and other documents have apparently captured evidence of fraud and the intent to commit such by CCA, the case should be straight forward and fast moving. Don't be surprised if, rather than filing a defence, CCA attempts to settle with Izmirilian. But attorneys are involved and they make money when a matter of this magnitude goes to trial. Even now egos and potential financial gain will be a huge factor in the decisions they make and the advice they give to their client. And at the end of the day guess who wins?

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stillwaters 9 months, 3 weeks ago

Go Izmirilian!!!!!!!! We are behind you!! What was done to you by our previous government was wrong, wrong, wrong!!!!!

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bogart 9 months, 3 weeks ago

EXCELLENT .IZMIRILIAN....!!!!.....Best of luck..!!!!!.....WAY PAST DUE ....BILLION DOLLAR CATHOSPRHE....HUGE DISASTER AFFECTED NATION.....PLENTY BAHAMIAN BIRTHRIGHT INVOLVED. LANDS... CONCESSIONS ...TIME...BAHAMIAN SACRIFICING...PEOPLE HIRED AN SHORTLY LET GO....WORLDWIDE BUSINESS EMBARASSMENT....LACK OF CONFIDENCE...BIGGEST PROJECT IN CARIBBEAN FAILED......!!!!!.....erry BAHAMIAN DOES KNOW ONE HAND DOES CLAP... JUS BY ITSELF.... RESULTIN IN DISASTER....WHO RESPONSIBLE...WHOSE FAILED DA CHECKS AN BALANCES...AUDITS...INSPECTIONS..BOARD OF DIRECTORS... ????...LEADING TO DISASTER...also involved BAHAMIAN BIRTHRIGHTS ACREAGE CONSESSIONS..........INVESTIGATIONS NEEDED...!!!!!

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TheMadHatter 9 months, 3 weeks ago

To CCA the MadHatter simply says "Ya Beast !!!"

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benniesun 9 months, 3 weeks ago

We should all cringe at this situation, because we are all at risk. Look at the possible logical conclusions of this. What if the Bahamas Government is found to be in collusion (by govenment I do not mean the PLP or FNM but the representatives of the Bahamian people) and culpable. Do you think that it is the politicians who will have to pay? That payback however huge will be on our backs for generations. And finally, if that is so, then what do you think will happen to our current arrangements with Moody's and cohorts, and our living standard?

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Well_mudda_take_sic 9 months, 3 weeks ago

If we, the Bahamian people, elect government officials who were quite well known to be corrupt before we elected them, and they subsequently rip off foreign investors while holding elected office, then it goes without saying that we should be made to bear the consequences of our foolishness for having elected known criminals to public office. So stop your whining and think, think, think (yes, think at least three times) before you cast your next vote for any candidate for elected office.

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benniesun 9 months, 3 weeks ago

If it is proven that CCA acted with another party, then why wouldn't the other party also pay up? Remember, Govenment isn't the individual politicians but representatives of a people. Government has deeper pockets than politicians.

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SP 9 months, 3 weeks ago

CONGRATULATIONS SAKIS. WE THE PEOPLE ARE BEHIND YOU 100%!

THANK JEHOVAH GOD that the U.S. courts will shed light on both CCA and dancing jackass Christie administration "decision-making". Too much went terribly wrong with an individual Bahamians came to love and respect, and the incompetence leading to the loss of hundreds of acres of the most expensive peoples' crown land in the country cannot go unpunished!

CCA, may dislike the bad publicity they brought upon themselves, and the people involved, but hopefully, the US legal system will find the Chinese government were wrong in their dealings with Sarkis and force them to pay justifiable damages leading to a greatly subdued Chinese presence in the Bahamas.

The U.S. court system will bring this case into the light and all the under the table dirty workings of dancing Jack-ass Christie, Wicked Witch Maynard, Shame Gibson, Sticky Fingers Dorsette, and panhandling Fitzgerald will be exposed and relevant charges made accordingly.

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benniesun 9 months, 3 weeks ago

Do some reseach and find out which interests financed both the russian and chinese revolutions. Did you ever question why american manufacturing was moved to China leaving americans unemployed and at the mercy of china's whims. The so called political dirty workings, sticky fingers and feigned incompetence by others were factored into the scheme to entrap "WE THE PEOPLE" into more debt.

If you want to take delight in a few low level dummies getting their just deserts, then fine. But to cheer in the demise of "WE THE PEOPLE" takes emotional and intellectual immaturity.

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John 9 months, 3 weeks ago

SP obviously you are mix up like conch salad. The government had no dealings with CCA to cause them to be a part of this lawsuit. Their dealings were with China ExIm bank who also are not a direct party to this lawsuit. The claims Sarkis is making is for fraud and breach of contract. This is before Christie dem got involved or mix up in this.

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Well_mudda_take_sic 9 months, 3 weeks ago

You should stop trying to spin untruths about widely publicized facts at the time of the events that most Bahamians are well acquainted with. It's quite unbecoming for even someone like yourself. There's a significant contributory element (by others) to the fraudulent activities that gave rise to the claims made by the original developer (Izmirlian) against the Red China enterprises involved in the development and current ownership of the Baha Mar property. The U.S. court system will see to it that there is a just outcome to this matter and this time there will be no Justice Winder to prevent that from happening.

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John 9 months, 3 weeks ago

Again you are proving to be a malnourished idiot. While ‘everyone, even you, may know about the PLP government involvement with China ExIM bank, that is NOT what this lawsuit is about, dummy. So stop pretending that it is and stop pretending to be the balance on the scale of justice. Yes, every Bahamian knows that China ExIM bank foreclosed on Izmirilian and Bah Mar and the Bahamian,Christie led government facilitated them in wrestling Bah Mar from Izmirilian. But don’t continue to be ignorant . In their wisdom, Izmirilian legal team decided to go after CCA rather than EXIM bank or the government or all together. They went back to the beginning, where it all started, with the construction company. And is Izmirilian prevails in this matter then that’s all that matters. The foreclosure by the bank becomes immaterial and so does the actions of the Christie government. CCA will have to pay and if they were in collusion with the bank or with the government, they they will have to fight that out. The judgment will be against CCS and they alone will be obligated to pay up. But, of course, you in your powdered milk narrow mindedness would love to see Christie dem drawn in. As the case is filed presently that is not going to happen. So put up the buds and popcorn. Law, unlike you, is without emotion. It’s based on facts unlike your posts under various names . So I double dareyou to tell me just one part of my post is untrue. Your fans are awaiting.

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Well_mudda_take_sic 9 months, 3 weeks ago

Whine as you may John, the facts are well documented and I seriously doubt the Red China connected parties involved will put up much of a fight in the U.S. court system. And I also seriously doubt the courts in the Bahamas will not fully respect the outcome of such a significant matter as determined by the U.S. courts. Who are you so anxious to protect and for what reason? As someone fond of the racketeering numbers bosses and their corrupt web shops, you're just not known to have much concern about justice and the upholding of the rule of law....that's just not your style! LMAO

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truetruebahamian 9 months, 3 weeks ago

Congratulations Izzy! May you win outright and hopefully we can rid ourselves of the venal red chinese interference and manipulation.

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John 9 months, 3 weeks ago

Again remember the lawsuit is against China Construction America and not China EXIM bank Who foreclosed on Bah Mar and ‘sold’ it to the current operators. If Izmirilian prevails in his lawsuit, the judgment will be strictly against CCA. If they cannot pay the court may seize assets or hold the judgment against further earnings. So the Pointe/ Sheraton is under more threat of being seized than Bah Mar. The current operators of Bah Mar acquired the property through a ‘legitimate ‘ transaction with China ExIM bank. And if there was collusion between the bank and the construction company this is not part of the claim. So China ExIm bank may give CCA a fake loan to help pay the judgment. But doubtful they will give up Bah Marwhich would involve third parties.

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Well_mudda_take_sic 9 months, 3 weeks ago

Repost: Whine as you may John, the facts are well documented and I seriously doubt the Red China connected parties involved will put up much of a fight in the U.S. court system. And I also seriously doubt the courts in the Bahamas will not fully respect the outcome of such a significant matter as determined by the U.S. courts. Who are you so anxious to protect and for what reason? As someone fond of the racketeering numbers bosses and their corrupt web shops, you're just not known to have much concern about justice and the upholding of the rule of law....that's just not your style! LMAO

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BMW 9 months, 3 weeks ago

So happy for Izmirilian, I hope all the dirty dealings by Christie and co come out! Better yet would like to see them on the stand in NY. You cant lie and bullshit in court and get away with it. GET EM IZZY.

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John 9 months, 3 weeks ago

Well mudder-take-sic: your re-post does not make you any more correct or add any substance to your rhetoric. LAW is based on FACT, and NOT Emotion. You said I published mistruths and lies about this matter. I challenge you, again, to indicate or point out just one. But you can't because you are a blogger bully. First, you post under different names to support your own posts and position. Second, you attack others personally when your posts get beat up on (badly in this case) because they are weak, full of hatred or lack substance. For the umpteenth time, BAH MAR, AS AN ONGOING CONCERN, IS NOT A PART OF THIS THE LAWSUIT BETWEEN CCA AND IZMIRILIAN. IT WAS FORECLOSED ON AND LATER SOLD. PERRY CHRISTIE AND/OR THE GOVERNMENT OF THE BAHAMAS IS NOT A PARTY TO THIS LAWSUIT. THEIR ACTIONS ARE SUBSEQUENT TO THE CLAIM IZMITILIN IS MAKING. The claim is for breach of contract, the construction contract as it relates to Bah Mar, and Fraud, also as it relates to the construction contract at Bah Mar. Why are you so upset and bitter that NO BAHAMIAN is party to this lawsuit and if any are called, even as witnesses it will be for their role either as contractors on the project and/or they employment with Bah mar at the time the fraud or breach occurred. So get over it. Chrisites role in Bah Mar is immaterial at this time or due to the way Izmirilian's lawsuit is so styled. Izmirilain wants compensation for his losses, he wants at least some of his money back,so Perry Christie is immaterial to him at this time..GET OVER IT!

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BMW 9 months, 3 weeks ago

Just who blocked izmirilians attempt at filing for bankruptcy?

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Well_mudda_take_sic 9 months, 3 weeks ago

Thank you BMW.

It's truly laughable that the very emotionally charged John tells me not to be so emotional. LMAO

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