The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar’s creditors list fails to show the full extent of the damage to Bahamian businesses and economy, as several companies expressed fears about “getting anything” of what they are owed following the Chapter 11 filing.

Robert Myers, the former Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman, told Tribune Business that the 1,000-plus creditors list did not include the Bahamian entrepreneurs who had invested millions of dollars into establishing shops and restaurants at Baha Mar.

And he pointed out that the $72.635 million said to be owed to the project’s main contractor, China Construction America ($140 million according to the company), likely included sums due to Bahamian contractors.

Effectively suggesting that the true multi-million dollar sum owed to local contractors was being masked, Mr Myers said it was “somewhat concerning that no one in the Government and Baha Mar is sticking up for the private sector” amid the Chapter 11 saga.

Disclosing that his company, Caribbean Landscaping, was owed around $50,000 by Baha Mar, Mr Myers told Tribune Business: “We’re not in deep. We saw the writing on the wall.

“We’d been exiting work with them anyway. We had been winding down there for some time, trying to resolve our outstanding accounts receivables with them. To the greatest extent, we’ve done that.”

Mr Myers last year expressed concern over the lengthy 90-120 wait his company was enduring to receive payment for work done at Baha Mar.

He revealed yesterday that Caribbean Landscaping was still owed a retention payment on one of its Baha Mar contracts, plus compensation for maintenance performed on one of the Cable Beach roads.

“It sucks and is a cash flow burden for us, but not one that we’re going to have to provide for long-term,” Mr Myers told Tribune Business, expressing annoyance that the Chapter 11 filing had occurred right at the time Baha Mar officials had promised payment.

“They told us we would get paid by the end of this month [June],” he added. “They freely admit they owe it, but we’re here at the end of June.”

Mr Myers reserved his greatest sympathies for Bahamian investors and businesses with far greater exposure to Baha Mar’s woes than himself.

The $3.5 billion Cable Beach developer revealed in its filings that it owes trade creditors $123 million, but Mr Myers said this effectively served to mask the depth of Bahamian involvement.

“People putting in retail, restaurants and shops will not be shown as creditors as they are investors in the property,” Mr Myers told Tribune Business. “You’ve got this whole other sector of people who have pumped in millions and are not shown as creditors.

“All this is a drain on the local Bahamian economy. The other thing that is somewhat concerning is that you’re hearing a lot about the Baha Mar employees being paid.

“I understand the need for doing so, but one in the Government and Baha Mar is sticking up for the private sector, and the private sector is out millions of dollars,” he added.

“We’ve paid for this construction, paid for that equipment, paid for that material, and no one is saying: ‘Let’s get the Bahamian contractor paid. What about them?’ That’s a massive effect, a big loss.

“It could potentially put some businesses out of business. Some are out multiple millions. It’s a tremendous loss for the country.”

Scott Farrington, Sun Tee’s principal, told Tribune Business that the small five-figure sum owed by Baha Mar to his business could effectively carry it for two months if paid in full.

“I’m what I consider a small business, so that has a tremendous impact on cash flow,” Mr Farrington told Tribune Business. “If I have a problem with cash flow, I cut hours and I cut people.

“So far, we’re OK, but we’re struggling on a month-to-month. The industry overall is super tough, and getting that [Baha Mar payment] would be great. That could carry me for another six to eight weeks.”

Sun Tee, like Caribbean Landscaping and Mr Myers, appears on Baha Mar’s creditor list. Mr Farrington said his company had managed to cut the sum owed from $21,000 to $10,000-$11,000 before the Chapter 11 filing.

His case illustrates the ‘ripple effects’ of Baha Mar’s woes for small Bahamian businesses and their employees, many of whom are now wondering whether they will recover 100 per cent of what is owed, or if they will have to settle for ‘pennies on the dollar’.

Articulating this concern, Mr Farrington told Tribune Business: “Regardless of the amount, I’m not going to take anything less than 100 per cent.

“Ninety cents on the dollar? Maybe. Ten cents on the dollar. No.”

He added that Sun Tee had been attempting to get payment from Baha Mar since February 2015, even going to the extent of sending his driver to Cable Beach to collect the cheque. He was turned away empty-handed.

A major Bahamian contractor, meanwhile, speaking on condition of anonymity, told Tribune Business it was owed $1.5 million for working as a sub-contractor of a sub-contractor at Baha Mar.

The company does not figure on Baha Mar’s list of ‘top 20 unsecured creditors’, despite being owed more than Cable Bahamas which does, indicating that Mr Myers’s about the real Bahamian impact being masked have merit.

“We’re just hoping something will get resolved,” the contractor’s principal told Tribune Business. “If not, we’ve got to protect ourselves and our legal rights. We’re reviewing that right now.”

Asked whether he was concerned about receiving ‘pennies on the dollar’, the contractor replied: “Very.

“I’m pretty concerned about getting anything right now. It appears this is a total, total Mexican stand-off. The Chinese don’t like losing face.

“At the moment we’re muddling through, but the longer this goes on for, the more serious it is for us. I can’t see any way out of this at the moment. Everybody is caught in the middle, and it’s the Bahamians that are going to suffer.”

The contractor suggested that Baha Mar had “hoisted itself by its own petard”, given that it had continued paying China Construction America despite a litany of alleged contract and performance breaches dating back to 2011.