The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar’s contractor yesterday described as “preposterous” claims by the developer that it was involved in a ‘conspiracy’ with the Christie administration to oust the Izmirlian family from the $3.5 billion project.

Michael Guiffre, the US attorney for China Construction America’s Bahamian subsidiary, urged the Delaware Bankruptcy Court to stop Baha Mar’s “proverbial fishing expedition” and prevent it from using the Chapter 11 action to “tarnish” the Bahamian government.

Mr Guiffre’s letter to Bankruptcy Judge Kevin Carey, written yesterday, ius seeking a protective Order to prevent Baha Mar from interrogating China Construction America (Bahamas) executives over their dealings with the Government subsequent to June 29’s Chapter 11 filing.

Slamming Baha Mar’s “unwarranted and inappropriate discovery”, Mr Guiffre said the developer’s demands were “wholly irrelevant” given that CCA (Bahamas) bid to dismiss the Chapter 11 action was founded on one issue - whether Delaware, rather than the Bahamas, was the correct forum for insolvency proceedings involving Bahamian companies.

“In response to CCA Bahamas’ relevance objections, the debtors [Baha Mar] alleged the existence of an unspecified ‘conspiracy’ between the Bahamian government, CCA Bahamas and the Export-Import Bank of China,” Mr Guiffre wrote.

“While the debtors’ allegations in this regard are preposterous, they highlight both the appropriateness of dismissing the debtors’ Chapter 11 cases and the need for a protective order.

“The debtors should not be allowed to engage in a proverbial fishing expedition in order to use the court as a forum to tarnish CCA Bahamas or foreign governments, or for other improper purposes outlined in our objections, including any effort to delay the court’s ruling on the Motion to Dismiss, which is scheduled to be heard by the court on August 17.”

Baha Mar has already served a notice via the court that it wants to interview, and depose, CCA Bahamas executives on August 12. It is also seeking the production of all documents exchanged between the contractor and the Bahamian government since the Chapter 11 filing by August 10.

Mr Guiffre’s letter said CCA (Bahamas) was objecting to these requests on the basis of “relevance, privilege, vagueness, and other specific grounds”.

And, in a subsequent letter also written yesterday, Mr Guiffre informed the judge of CCA (Bahamas) further objection to Baha Mar taking witness statements from Timothy Eneas, the McKinney, Bancroft & Hughes attorney, who is acting as the contractor’s legal counsel in the Bahamas.

While initially prepared to fly Mr Eneas from the Bahamas to Delaware, CCA (Bahamas) then backed off on the grounds that Baha Mar refused to “limit the questions they will ask” Mr Eneas.

As a result, CCA (Bahamas) is also seeking an Order that will prevent Baha Mar taking Mr Eneas’s deposition, adding: “CCA Bahamas submits that it is unnecessary and inappropriate for the debtors to conduct any deposition of Mr Eneas concerning the matters to which he attests.

“Accordingly, debtors should not be permitted to conduct the invasive deposition they intend.”

Mr Guiffre’s letter confirms that Baha Mar is seeking ‘smoking gun’ evidence proving that the Christie administration has sided with the Chinese against it, and that the two are working together to oust the Izmirlian family as the project’s principals.

Tribune Business has already heard of, or obtained, anecdotal evidence that the Government is working closely with the Chinese companies to resolve the $3.5 billion Baha Mar impasse.

A well-placed source, speaking on condition of anonymity, read out to this newspaper an e-mail that Sir Baltron Bethel, the Prime Minister’s senior policy advisor, sent to Michael Zou, an attorney with the US law firm, Hogan Lovells, on July 23.

Sir Baltron had suggested that a new equity partner, with hotel and casino experience, be brought in to invest in Baha Mar as a way to secure the necessary financing to complete the project and get it open.

However, he suggested that the idea be seen as coming from the China-Export Import Bank, Baha Mar’s debt financier, rather than the Government to avoid any impression that the latter was trying to oust the Izmirlian family.

And this newspaper also previously revealed a letter sent by Allyson Maynard-Gibson, the attorney general, in which she expressed the Government’s “profound gratitude” to Baha Mar’s contractor for its role in attempting to resolve the dispute over the $3.5 billion project.

She praised the company’s “essential contributions” at the “marathon meetings” between all parties to the dispute.

Mr Guiffre’s letter yesterday suggested that much of the information sought by Baha Mar from his clients was subject to ‘attorney-client privilege’ and other requirements preventing disclosure.

He then added that the information exchanged between CCA (Bahamas) and the Government was “protected by the common interest or community-of-interest privilege”.

“These interested parties share a common legal interest in the establishment of the Bahamas as the appropriate forum for the debtors’ insolvency proceedings,” Mr Guiffre added.

He also alleged that Baha Mar was “improperly seeking confidential” information on the settlement discussions over the $3.5 billion dispute, along with CCA Bahamas’ proprietary and financial details.

“The debtors are seeking this discovery for improper purposes, which may include the debtors’ desire to harass and unnecessarily increase the costs to CCA Bahamas, to delay and otherwise interfere with preparations for the hearing on the motion to dismiss, to gather information to obtain an unfair advantage in any settlement negotiations, as well as information pertaining to any criminal or other government investigation of the debtors’ activities,” Mr Guiffre alleged on CCA Bahamas’ behalf.