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Baha Mar developer hits out following receivership

Baha Mar’s original developer Sarkis Izmirlian.

Baha Mar’s original developer Sarkis Izmirlian.

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

BAHA Mar developer Sarkis Izmirlian yesterday broke his silence on the Supreme Court’s appointment of a receiver to the stalled project, saying the move is a part of a pattern of “disastrous actions” that have led to Baha Mar’s continuing struggle to be completed and opened this year.

In a statement released by BMD Holdings, Mr Izmirlian pulled no punches in criticising the Christie administration and the resort’s Chinese stakeholders, accusing them of being “more focused on legal and political manoeuvres than on solutions.”

He also accused the resort’s general contractor China Construction America (CCA) Bahamas of engaging in “reckless and self-serving” behaviour at the expense of Baha Mar, adding that the contractor appears to be continuing the same pattern at its own development in downtown Nassau, The Pointe.

His statement came after Deloitte & Touche Managing Partner Raymond Winder, with the firm’s partners from China were appointed Baha Mar receivers on behalf of the Export-Import Bank of China, which is Baha Mar’s secured creditor through its $2.45 billion mortgage debenture. The move sidelines Mr Izmirlian by removing him as owner of the project he created and in which he had invested $850 million.

“The appointment of a receiver by the Export-Import Bank of China continues the unfortunate pattern of disastrous actions taken by other stakeholders since Baha Mar has filed for Chapter 11 that have moved Baha Mar further from completion and are now destroying any hope that Baha Mar, as originally conceived for the Bahamas, can become a reality,” Mr Izmirlian said. “I, along with thousands of Bahamians, have worked very hard to make Baha Mar a reality.

“The facts are straightforward. China Construction America failed to meet its promises to complete the resort on the timetables it set, and failed to meet its financial obligations to Baha Mar, engaging in reckless and self-serving actions at the expense of the project as it now seems to be doing as well at The Pointe, in downtown Nassau. The government of the Bahamas failed to meet its promises to Baha Mar, including making timely payments of monies it was obligated to pay Baha Mar. The result was a liquidity crunch last June that put Baha Mar at risk. To mitigate that risk, the board of Baha Mar determined that the proper, and only truly viable course, was for Baha Mar to voluntarily file for Chapter 11 (bankruptcy protection) under US law, a reorganisation option that does not exist in the Bahamas as the provisional liquidation has now proven.”

He added: “Under Chapter 11, Baha Mar’s assets would have been protected; we would have had the opportunity in a prudent manner to try to resolve the issues between the parties; we put forward a plan to pay all valid Bahamian claims in full; we were able to continue to pay the salaries of the more than 2,000 Baha Mar employees; and any downsized employees would have received severance which sadly they will now not receive.”

The Christie administration has disputed Mr Izmirlian’s notion that Baha Mar would have been on a path to completion if it had gone through the Chapter 11 process, pointing out that resort officials had a contingency plan in its bankruptcy filings to make staff redundant.

Still, Mr Izmirlian said: “The government of the Bahamas, in concert with China Construction America and CEXIM, undertook a campaign that resulted in the Chapter 11 being dismissed. The effect of this effort by the government of the Bahamas, China Construction America and CEXIM now leaves Baha Mar in the position where CEXIM bank is now the owner of Baha Mar; most of its employees have been laid off; widespread collateral damage to hundreds of businesses; and its assets are being further impaired.”

“Even under these circumstances, I have continued to try to make proposals to achieve a consensual resolution of the issues that would enable Baha Mar to be properly completed and to open. Unfortunately, the other stakeholders remain more focused on legal and political manoeuvres than solutions. Neither CEXIM appointing a receiver, nor a winding up/liquidation of Baha Mar, serve the best interests of any party and certainly not those of the people of the Bahamas. At the end of the day, whilst we want to see a beautiful resort open, the goal is also a thriving Bahamas.”

Baha Mar filed for Chapter 11 bankruptcy protection in a US Bankruptcy Court for 15 of its companies on June 29.

However, in September, a US judge threw out the Chapter 11 cases for Baha Mar’s Bahamian companies.

Judge Kevin Carey in his written ruling concluded: “Chapter 11 of the United States Bankruptcy Code, with all stakeholders participating, under these circumstances, would be an ideal vehicle for the restructuring of this family of related companies with the ultimate goal of finishing a project said to be 97 per cent complete and, upon its exit from Chapter 11, to be in sound financial footing, with appropriate treatment of creditors. I am consequently disappointed that the parties have been so far unable to formulate a consensual exit strategy, whether that would involve taking a plan to confirmation or providing for an agreed dismissal as part of a consensual resolution of their disputes.”

On September 4, Edmund Rahming of KRyS Global, Mark Nicholas Cropper and Alastair Beveridge of AlixPartners Services UK were appointed as joint provisional liquidators and given the task of overseeing the company. In October, the joint provisional liquidators got approval from the Supreme Court to make 2,020 Baha Mar employees redundant due to the resort’s insolvency.

After the Supreme Court’s ruling on Friday, Mr Winder said receivership would allow for the continuation of the process started by the court appointed liquidators.

Comments

banker 8 years, 7 months ago

You know, if the jackals, hyenas and bottom feeders like Winder, Winder, Rahming et al had even an iota or shred of patriotism, they would forego the huge fees that they will collect and turn down the appointment because it is in the better interest of the Bahamas as a country. But like the Christie government, and the PLP throughout its history, everything in this country, including the country itself is for sale. There are no real Bahamian patriots.

John 8 years, 7 months ago

Seems like Izmirilian and everyone else (The Christie Government, China ExIm bank and China Construction Company) are stil not on the same page on Bah Mar. Is Izmirilian still being punished for filing for bankruptcy protection, yes protection, while Christie and his government are knowingly or unknowingly , sleeping with the enemy? Why the rush to move the Chinese 's project, The Pointe, forward, even blatantly violating rules of the Bahamas, rules that can severely compromise the safety of many, when the terrible and embarrassing mess at Bah Mar has not yet been remedied and cleaned up? Maybe those who are advising Christie need quick lessons in international business law and conflict resolution. Conflict Resolution? If the bankruptcy order filed in Delaware had been allowed to stand. Bah Mar would have been completed by now and, if the project was moderately successful, it could have emerged from chapter 11 by 2017.

TruePeople 8 years, 7 months ago

As far as i can see, anything to do with CCA is a compromise of saftey

John 8 years, 7 months ago

Even if Bah Mar goes into receivership and Izmirilian continuing his lawsuits against China Construction and China ExIm bank it will be difficult to find a buyer for the resort. If Izmirilian prevails on the lawsuits he must be granted relief. This could very well mean that control of Bah Mar is returned to him along with some hefty penalties. These two companies are already involved in several contract controversies around the world. I completed projects and shoddy workmanship. Take heed.

Franklyn 8 years, 7 months ago

There are silver linings in every misfortune and Baha Mar which was to become another No Go Zone in the Bahamas for Bahamians; where a combative and militarized security force had already exist. A group of young people and former police officers who were train to distrust and disrespect Black Bahamians? Mr. Izmirlian or those advising him has craftily used old (Darwin and Lynch) techniques of “divide and conquer” - tactics to put hungry and angry young Bahamian against other Bahamians and country. Thinking all Bahamians are nincompoops: we most read his (Izmirlian) statements and then we are expected to believe these statements are true; because it’s coming from Mr. Izmirlian:- (“The facts are straightforward. China Construction America failed to meet its promises to complete the resort on the timetables it set, and failed to meet its financial obligations to Baha Mar, engaging in reckless and self-serving actions at the expense of the project as it now seems to be doing as well at The Pointe) The government of the Bahamas failed to meet its promises to Baha Mar, including making timely payments of monies it was obligated to pay Baha Mar. The result was a liquidity crunch last June that put Baha Mar at risk.) But the facts are clean Mr. Izmirlian: you, who quite conveniently and blatantly ignores that it is you (Baha Mar) and its board of director who has created the mess, and in a classic sociopath way you exonerates yourself and your board of directors of any and all culpability. - while not once mentioning how and when Bahamian contractors will be paid. But there are those around Mr Izmirlian who will mislead this young man to his destruction, know quite well that the nincompoop factor those not apply to many in the Bahamas, a country of highly educated and well experience Black People. Lacking the experience, Mr. Izmirlian was misled by his board of directors – evident in the current state of (Baha Mar) his company. This is not a new movie for The Bahamas where naive foreign investors are taken for a ride by self-serving people. My advice Mr. Izmirlian – fire your entire board of directors and start new.

Tarzan 8 years, 7 months ago

Gibberish! Pure gibberish!

banker 8 years, 7 months ago

As a Bahamian resident of Paradise Island, I take exception to you characterizing security as militarized and as a No Go Zone in the Bahamas for Bahamians.

Have you ever seen Bahamian youth on a Friday night, congregate at Marina Village, and mill about in crowds, with their vile language, their drinking, their lascivious displays with young Bahamian females and being an obnoxious presence that disrupts the tourists? Even I am uneasy with that! It is not disrespecting Black Bahamians, it is protecting our number one source of income.

The sad fact is that Bahamas ARE poorly socialised nincompoops with no respect for anything, including authority, public cleanliness, social niceties, and decency with comportment.

They are truly pests in a tourism area where tourists expect a certain standard of crowd behaviour, where they can feel safe.

You can't have it both ways -- you can't live off Foreign Direct Investment and tourism and expect to be kings in your own country -- although the PLP's are succeeding at being queens -- but that is another topic for discussion.

May I point out that years ago, a certain Mr. Hubert Alexander Ingraham floated the idea of female constitutional equality, AND the diversification of the economy with the Third Pillar Proposal, and the criminal partisans convinced Bahamian nincompoops to vote it down, and thus putting us in the handcart on the road to hell. But I digress.

We will never be the owners of our own country unless we stop selling ourselves as azzwipers to rich tourists. And as that caste, we do not know how to behave in civilised surroundings. Look at the quantity of used condoms and dirty diapers at Goodman's Beach. So we are economic slaves. So mote it be.

Franklyn 8 years, 7 months ago

...you must be an older female, I know many young foreign tourist (twit - Bahamas%girls%sex) who die for the lascivious display of young Bahamian females, and some that "pay top dollar" for an obnoxious night with these females ;) : but I do agree, it may disrupt some tourist.

TruePeople 8 years, 7 months ago

my bey what you on? If you wan prostitute ya sista dem carry yuh ras to south east asia. You more like di Chinese

Franklyn 8 years, 7 months ago

...like day is tell me all da time ...it payin da bills them.

Publius 8 years, 7 months ago

The sad fact is that Bahamas ARE poorly socialised nincompoops with no respect for anything, including authority, public cleanliness, social niceties, and decency with comportment.

Bahamians, or young people?

John 8 years, 7 months ago

Is this paid political propaganda? The government can be faulted as much or more than any. They are the ones that give so card developers complete and exclusive beach access. Your government allows a $3.5 billion project to Coe into the country with $1 billion in concessions and no Bahamian equity. Then what example are they setting by allowing a construction company steeped in controversy and conflict to proceed on a project in the heart of the city without required permits and approvals while the average Bahamian is being fleeced and strip searched in the middle of busy streets even without probable cause.

TruePeople 8 years, 7 months ago

The gov't is the biggest criminal round here, and poor people are the most convicted

realityisnotPC 8 years, 7 months ago

OMG, why do some Bahamians always have to play the race card?! Yes, there are many well educated Bahamians; most of them (1) wouldn't belittle themselves by playing the race card and (2) have more sense than to believe Government's propaganda that Izmirlian, the evil foreigner, is to blame for all the mess. The word on the street is that two high ranking Government officials received multi-million dollar payments from their Chinese paymasters to get rid of Izmirlian the day after the Chapter 11 filing...looks like they earned it.

SP 8 years, 7 months ago

......................... P.M. Christie needs to stay out of big peoples business ......................

Judge Kevin Carey in his written ruling conclusions on the chapter 11 suite is more than ample ammunition for Sarkis Izmirlian to legally counter anything Christie and alleged coconspirators are attempting.

China Construction America and government failed to meet its promises full stop!

How on earth can they now think they have grounds to liquidate or file receivership, when it is they themselves that breached the original agreement?

Sarkis will now file against them, further delaying completion. Which means protracted legal battles, leading to many months of negative growth, sending Bahamas nosediving into recession.

Disaster for Bahamians, disaster for Bahamas, disaster for Christie, disaster for government, headache for Izmirlian.

The only player with their tail covered is the creditors as in the end they cannot lose no matter the eventuality.

jus2cents 8 years, 7 months ago

Baha Mar is not the only Chinese-backed plan under a cloud in the hemisphere.

Read more here: http://www.mcclatchydc.com/news/nation-…

It's a clusterF*&K !

TruePeople 8 years, 7 months ago

"and thousands of Chinese laborers toiled around the clock to build what was touted as an ultra-chic resort with four world-class luxury hotels and 40 restaurants."

Tell me sey CCA PLP dem was never bout better bahamas... they ein never even wan hire Bahamian worker when we have 11,000+ unemployed youths in Nassau

HarryWyckoff 8 years, 7 months ago

Have you considered taking a Hooked On Phonics program?

It might help with your ability to create lovely graphics that aren't utterly incoherent.

TalRussell 8 years, 7 months ago

Comrade Harrywyckoff you got's me all smiling how quickly you can tell, I sure did's most certainty tries out that fancy Hukd On Fonix - but it ain't wurked not'in fur me. Just go look how Banker does be bloggin, after getting all Hukd on Fonix..

asiseeit 8 years, 7 months ago

Is Izzy for real? If my 850 MILLION was stolen in such a manner it would be WAR. This dude seems to be just taking it in stride. I would be out for blood not making press releases!

HarryWyckoff 8 years, 7 months ago

He's probably just biding his time before he releases all the evidence that this government is corrupt and rotten to the bone, and exposes their back room deals with the Chinese.

... which TalRussell and Birdie will then explain was all the FNM's fault and the PLP are the answer.

BoopaDoop 8 years, 7 months ago

....and sucking teeth at the DOCK that Bahamar built.

My2cents 8 years, 7 months ago

I agree he is showing more restraint than most could have mustered including those who are defrauding and attacking his character. I hope he takes his lawsuits and any recourse available as far as it would go...what's happening is just plain wrong.

Clamshell 8 years, 7 months ago

" ... continuing struggle to be completed and opened this year."

This year? Are you shltting me? Put down your cellphone for a moment and check your calendar, dude ... mine says "November". Is everybody at The Tribune this stupid?

TomMariner 8 years, 7 months ago

Hey Sarkis -- finally you get it. This whole stopping work thing was a way to get you out -- the CCA and the Exim bank of China now own your share. All it cost the Bahamas was two years of massive tourism, and the public two years of finding out about the New Riviera. (Provided the CCA is actually capable of finishing the thing!)

And you developers who are considering doing a project financed by the same folks and built by the same company may want to read that contract very carefully. Many countries do not have the strict business ethics rules of the US.

TruePeople 8 years, 7 months ago

Plus a HUGE eyesore on what use to be Cable Beach. That hotel is damn ugly, especially as it is rite nah

DiverBelow 8 years, 7 months ago

The old adage of 'Beware of strangers bearing gifts' is becoming very clear.
One only has to Google 'Chinese construction fiasco's' to get a perspective & pattern to their business-as-usual methods.
It is understandable to want to initiate another local project to keep the imported employees &/or equipment local & operational. It is the method of strong-arming the client and government by slowing down the incomplete present job (BahaMar) as leverage for the second job (The Point). There is the real crime... or is it the collusion & whitewashing of such actions?

SP 8 years, 7 months ago

................................... Sarkis will need to turn to the Privy Council .....................................

No point attempting to get justice in P.M. Christies Banana Republic kangaroo courts.

Pei 8 years, 7 months ago

I have never known someone who is more "reckless and self-serving" than Izmirilian. Everyone is aware that Export-Import Bank of China has invested 2.5 billion in this project, and how could they do not want the project to be finished? It's Izmirilian who file for the bankruptcy protection when the project is almost 97% finished. What he want is just asking for more money from EIBC for himself. Where did he spend the 2.5 billion US dollor? The construction cost which is still in dispute is 75 million according to the Baha Mar duputy, and the total construction cost should be no more than 1.8 billion. Please be advise where the 700 million has been gone!

Izmirilian is just fooling Bahamian People, and trying to get all the money in his pocket.

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