The only U.S. subsidiary of Baha Mar Ltd., the Bahamian company in receivership and going through court-ordered liquidation, has asked that its own petition for U.S. Chapter 11 bankruptcy protection be dismissed.
Baha Mar, the parent company of the stalled $3.5 billion resort project that sits 90 percent complete on Nassau’s Cable Beach, filed for Chapter 11 bankruptcy protection in the U.S. after work stopped on the massive resort in a dispute with the contractor, a subsidiary of Chinese state-owned China State Construction Engineering. The Bahamian government took the position that Baha Mar, as a Bahamian company, was ineligible for protection under U.S. bankruptcy laws, and initiated liquidation proceedings.
Baha Mar founder and former CEO Sarkis Izmirlian had filed the Chapter 11 petition June 29 in an attempt to secure enough cash to complete and open the project. After the Bahamian government stepped in, a motion to dismiss the Chapter 11 petition was filed with U.S. Bankruptcy Court. U.S. Bankruptcy Judge Kevin Carey granted the motion for all but the U.S. subsidiary.
On December 22, a new motion to dismiss was presented to the U.S. judge, with Northshore attorneys arguing dismissal of the claim would be in the best interests of all—it states that the Northshore entity currently serves no purpose other than holding debt, since there is no business connected to it.
“The Baha Mar project currently remains unfinished and shuttered,” the motion read. “In light of the current status of the Baha Mar project including CEXIM’s (main financier Export-Import Bank of China) appointment of a receiver, and in order to avoid any further accrual of administrative expenses, the debtor has determined that dismissal of the Chapter 11 case is in the best interest of its estate and parties in interest…
“Indeed, the debtor has no ongoing business operations, no business to reorganize or liquidate.”
The Bahamian government has been working with CEXIM and the contractor to restart construction and open the resort, a six-hotel complex including the largest casino in the Caribbean on which the Bahamas is relying to revive tourism and address chronic unemployment.
Speaking to the Bahamas Tribune, Bahamas Prime Minister Perry Christie last week said he expects Baha Mar to be completed early next year.
“About two days ago I wrote a very strong letter to the president of the China Export Import Bank setting out the fact that a very significant number of world-class operators have gotten involved and made applications for the property to assist to put money into the property to bring it to a conclusion and an opening,” he said. “These are big American companies. We have seen some of China’s biggest companies themselves and they have indicated a preparedness to buy in to the development.
“So for the Bahamas, we have a situation where the construction company has taken the position that it does not want to start construction without paying their subcontractors, and that includes the Bahamian subcontractors. And I’ve argued that I’m not prepared to accept that those contractors will be paid less than a dollar for a dollar for the work performed. So I’m anticipating that 2016, very early in 2016 that we’re going to have a major move for Baha Mar.”
