By NEIL HARTNELL
Tribune Business Editor
An accountant who sat on Baha Mar's creditor payout committee has been exposed as the "bag man" who passed Sarkis Izmirlian's confidential legal papers to the project's main contractor.
Legal filings by the $4.2bn project's original developer have identified Norbert Chan, a China-based Deloitte & Touche accountant, as the person who provided China Construction America (CCA) with documents that Mr Izmirlian claims belong to him by virtue of attorney-client privilege.
Mr Chan's role was revealed by CCA's US attorneys in responses to questions posed by Mr Izmirlian's counsel. They disclosed that he "hand-delivered" the papers "in a sealed envelope" to a CCA (Bahamas) employee in Beijing the day before the Bahamian Supreme Court was due to hear arguments as to whether they should be "unsealed".
The materials were then passed to Tiger Wu who, together with Daniel Liu, represented the most senior CCA executives on the ground in The Bahamas during Baha Mar's ill-fated 2011-2015 construction. Mr Wu then shipped the papers on to CCA's in-house general counsel and the state-owned contractor's US attorneys, the latter of whom eventually confessed all.
As a result, Mr Izmirlian petitioned the New York State Supreme Court on November 27 to "rectify" CCA's allegedly "improper conduct" by issuing a protective Order requiring the contractor, its attorneys and their associates to destroy or hand over all copies of the papers so that they cannot be used in his ongoing $2.25bn fraud and breach of contract claim.
The documents central to the latest skirmish between the original developer and his long-time CCA adversary are legal opinions produced by two international law firms, Glaser Weil and Kobre & Kim, that assess the strength of the potential legal claims and related damages Mr Izmirlian had against the Chinese contractor in early 2015 after it failed to complete Baha Mar on time and on budget.
These works, which Mr Izmirlian alleges are privileged communications between a client and his attorneys, were inherited by Baha Mar's Deloitte & Touche receivers and used to help produce reports valuing the legal claims against CCA as part of a process to determine the worth of Baha Mar's assets.
The valuation reports remain "sealed" by the Supreme Court following Justice Ian Winder's May 1, 2019, ruling, but Mr Izmirlian and his attorneys are furious that neither CCA nor the receivers disclosed that the contractor had already obtained these documents one day before the the Bahamian court hearing on the matter.
And no disclosure was made prior to the judgment either, leading the original developer and his advisers to accuse CCA of "defying the orders" of the Supreme Court.
The incident has sparked a row between Mr Izmirlian's US attorneys and Lennox Paton, the Bahamian law firm that represents the former Baha Mar receivers, who then included now-Commonwealth Bank president, Raymond Winder.
Lennox Paton, according to Mr Izmirlian and his legal team, has to-date refused to answer any questions posed to it by Glaser Weil, which is probing to discover whether anyone else among the Deloitte & Touche receivers was involved in helping Mr Chan both leak and obtain the two disputed legal opinions and the same number of valuation reports.
Peter Sheridan, in a September 16, 2019, letter to Brian Simms QC, senior partner at Lennox Paton, alleged: "At the March 26, 2019, hearing and at the time of issuing judgment neither the joint receiver managers (Deloitte & Touche) nor CCA informed the court that CCA had already been provided with the two opinions.
"This constituted a knowing omission by the joint receiver-managers, withholding from Justice Winder the truth, namely that the legal opinions at issue in the hearing had already been provided to CCA" one day before."
Mr Sheridan, careful not to accuse Mr Simms or any other Lennox Paton attorney of knowing about "the improper provision" to CCA, added: "The above facts demonstrate that the joint receiver managers intentionally failed to inform the court that the documents under seal were previously disclosed to CCA in violation of the joint receiver managers' duty as officers of the court."
Mr Simms, in a previous letter to Mr Sheridan that was disclosed by Tribune Business, had branded his and Mr Izmirlian's claims as "misconceived and wrong" on the basis that the Bahamian Supreme Court "seal" only prevented third parties not involved in the Baha Mar dispute from accessing the documents.
He explained that there was nothing to prevent them from being shared among entities involved in the case, which the receivers, CCA and China Export-Import Bank all were. And Mr Simms also rejected Mr Izmirlian's claim that the legal papers were protected by attorney-client privilege.
The Bahamian QC argued that the advice was provided to Baha Mar and not Mr Izmirlian's BML Properties vehicle, which is the entity bringing the New York case. He also said the latter vehicle was not entitled to them even if it had acted as Baha Mar's manager as claimed.
This, though, prompted an immediate riposte by Mr Sheridan, who said Justice Winder's May 1 judgment "contradicts your assertion that there is no basis for any legal privilege". He added that this issue had already been dealt with by the Bahamian Supreme Court, "which found that Baha Mar's privilege had not been waived such that CCA is not entitled to gain access to them".
Arguing that BML Properties retained "joint interest privilege" in the legal opinions, Mr Sheridan told Mr Simms: "It is therefore wholly improper for you to state: 'It is not apparent to me how the documents could belong to BML Properties when there is no evidence that the advice to which the documents pertain was ever sought or obtained by BML Properties'. That is for the courts to decide, not you."
The timing of the March 25, 2019, document handover suggests that CCA, aided by the China Export-Import Bank, was effectively hedging its bets as to the outcome of the Supreme Court hearing and decided it needed to obtain the documents by whatever methods proved necessary.
Both CCA and the China Export-Import Bank, which as Baha Mar's financier appointed the receivers, share the same owner in the Chinese government. Mr Chan is a China-based employee of Deloitte & Touche which operated as the bank's agents in their role as Baha Mar receivers.
He was also a member of the committee established to assess Bahamian creditor claims, and make around $101m worth of payouts to them, in the wake of China Export-Import Bank moving to realise its loan security and take possession of the Baha Mar project following its collapse into Chapter 11 bankruptcy protection.