Bahamas Prime Minister Perry Christie wanted to bankruptcy of Baha Mar in Nassau controlled by his government, not by the U.S. bankruptcy courts, where the owners initially went. But when the appointed liquidator last week fired more than 2,000 workers, calling them “redundant,” he had second thoughts.
“Prime Minister Perry Christie has responded with disappointment for the affected Baha Mar employees and their families at the action taken by the joint provisional liquidators in making some 2,000 employees redundant,” a statement the prime minister’s office said. “This arises from the insolvency of Baha Mar and the protracted exercise to secure a negotiated settlement.”
Baha Mar has struggled since its inception. The owners, led by Sarkis Ismralian, lured the China Import Export Bank to fund the $2 billion project, with the condition that China State Construction build the project, importing more than 4,000 Chinese workers to complete it.
When certain deadlines were missed by China State, Baha Mar refused to pay the balance of the construction cost until it was completed, leading to a standoff that is now approaching one year.
The layoff of the 2,000 workers was a setback for Christie, who considers Baha Mar to be crucial to the national economy.
The liquidators, which includes AlixPartners of the UK, says time has run out on the project.
Alastair Beveridge, of AlixPartners, said payments to staff “who were not doing work,” could not continue.
“We were paying housekeeping staff when there was no housekeeping to do, spa staff when there was no spa, casino staff when there was no casino to operate,” Beveridge said. “Thanks to monies that were made available to us by the government from funds that were due to Baha Mar for road construction works, we were able to keep these staff members on as long as we did. We know that they have obligations, that many of them gave up other jobs to join the Baha Mar dream team and now we are continuing to focus on how best to make that dream a reality.”
Christie’s office was adamant.
“The government has made the strongest possible representation to the joint provisional liquidators and the stakeholders in this commercial transaction between the developer Baha Mar, the secured lender China Export Import Bank and the principal contractor and an equity partner, China State Engineering and Construction Company, for the retention of Bahamian staff, meeting outstanding obligations to Bahamian contractors and sub-contractors, funding (both interim and for completion purposes) and completing the project on mutually acceptable terms as soon as possible,” the statement said. “Whether the process of a negotiated arrangement is achieved or the bank proceeds to receivership in the time remaining before the November 2 court date when the process of liquidation could be started, the government is presently engaged in meetings and other dialogue with the relevant stakeholders and the joint provisional liquidators to arrive at the best possible solution which will best serve the national interest.”