The Baha Mar mess exploded once again into the political world in the Bahamas when former Prime Minister Hubert Ingraham weighed in. Ingraham said that the government was “dead wrong” to impose liquidation on the Baha Mar integrated resort when it declared bankruptcy in the U.S. in June 2015. He said the government should have let the process play out and possibly the resort would be open now with new owners.
Ingraham compared the situation to the bankruptcy of Resorts International in the early 1990s that resulted in the sale of the Paradise Island properties owned by Resorts to Sun International, the company controlled at that time by casino magnate Sol Kerzner. Sun went on to develop the Atlantis, now the biggest tourist attraction in the country.
Government officials disagreed, however, saying that the two situations were unique.
“The Baha Mar proceedings differed sharply from the two Resorts International bankruptcies,” said Progressive Liberal Party Chairman Bradley Roberts in a release. “The properties on Paradise Island controlled by Resorts International were part of a much larger enterprise that included casinos in Atlantic City, New Jersey.
“The Resorts International bankruptcies affected holding companies and their creditors and led to the sale of the Paradise Island properties to Sol Kerzner; but they did not jeopardize the Bahamian economy or the interests of Bahamian employees or other creditors. By contrast, the Baha Mar project constituted virtually the only material asset of any of the Baha Mar companies (whose connections with the United States, let alone the state of Delaware, were minimal), while the Baha Mar companies’ bankruptcy threated to harm, and has gravely harmed, the Bahamian economy and Baha Mar’s Bahamian employees and creditors.”
Roberts said a Chapter 11 filing in the U.S. would have prolonged the situation ever more that it has.
“It could not possibly have changed the outcome for Baha Mar, except for the worse,” said Roberts. “By commencing winding-up proceedings and moving for appointment of provisional liquidators, the government preserved the possibility of a negotiated resolution, while assuring that the fate of the Baha Mar resort and the claims of its creditors would be determined in the Bahamas—not in a bankruptcy court in Delaware. This measure, among other things, saved Bahamian unsecured creditors the cost of pursuing their claims in the U.S.”
Roberts claimed that what Ingraham was suggesting would have compromised the sovereignty of the Bahamas.
“When faced with the decision to stand up for The Bahamas, the leadership of the (Ingraham’s party) FNM always waffles and struggles on this score. The decision of the Christie administration to oppose the subjugation of our sovereign jurisdiction to a foreign one, reducing our judiciary to a rubber stamp was a matter of sovereignty and we stand behind the government on this policy decision.”
