The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

China Construction America’s (CCA) admission that it began co-operating with the Government on legal strategy within 24 hours of Baha Mar’s Chapter 11 filing “says a lot about their very cosy relationship”, one of the developer’s directors said yesterday.

Dionisio D’Aguilar told Tribune Business that the contractor’s admission “confirms what everyone thought” in terms of the Christie administration immediately siding with the Chinese in the wake of Baha Mar’s decision to seek bankruptcy protection from the Delaware courts.

Court documents reveal that CCA was co-operating with the Government on legal strategy to oppose Baha Mar’s June 29 move the very next day - and possibly even before Baha Mar filed for recognition by the Supreme Court of the Chapter 11 proceedings on June 30

They also disclose that CCA was working with the Government for two entire weeks before they both began to co-operate with Baha Mar’s financier, the China Export-Import Bank, which enjoys common ownership with the contractor in the shape of the Beijing government.

“CCA and the Bahamas [government] share the common legal interest in the establishment of the Bahamas as the appropriate forum for the debtors’ insolvency proceeding,” the contractor’s filings stated.

“CCA and Bahamas began co-operating in developing legal strategy in furtherance of their shared common legal interest on June 30, 2015.”

In response, Mr D’Aguilar told Tribune Business: “It says a lot. It says they have a very cosy relationship. It was obvious by the fact it was always Baha Mar’s fault, Sarkis [Izmirlian] was being unreasonable, and Baha Mar should come to the table and accept the terms.

“That clearly wasn’t the case. It’s [the court documents] actually confirming what everyone thought. The Government seemed, unfairly so, on the side of the Chinese and moving in step, and in tandem, and in check with them. They could do no wrong.”

Laura Davis Jones, one of Baha Mar’s US attorneys, argued in an August 21, 2015, letter to US bankruptcy judge Kevin Carey that the co-operation dates disclosed by CCA undermined its rationale for failing to disclose hundreds of documents.

While CCA began working with the Government on June 30, one day after the Chapter 11 filing, the two parties only began co-operating with the China Export-Import Bank on July 14.

“This discrepancy actually undermines CCA’s apparent position that the debtors’ recognition application (initially filed with the Bahamian court on June 30, 2015) somehow automatically unified all three parties in opposition, and gave rise to a common interest,” Ms Davis-Jones wrote.

CCA is standing by the ‘common interest’ with the Government and China Export-Import Bank, plus attorney-client privilege, as the basis for “withholding hundreds of documents” from Baha Mar’s discovery demands.

The developer believes these are essential to proving its claim that there was a ‘conspiracy’ between the three parties to oust its principals, the Izmirlian family, from the $3.5 billion Baha Mar project.

Baha Mar alleged that CCA is withholding some 302 documents, including e-mails sent to, from or copied to Prime Minister Perry Christie; attorney general Allyson Maynard-Gibson; and minister of state for legal affairs, Damien Gomez.

Others on the CCA e-mail list include Sir Baltron Bethel, the Prime Minister’s senior policy advisor; Antoinette Bonamy, director of legal affairs; Loren Klein, consultant in the Attorney General’s Office; Danya Parker-Wallace, deputy director of legal affairs; and Paulette Zonicle, the Bahamas’ consul-general in Washington D. C.

Also named in the e-mail list were two senior Bahamian attorneys, Brian Moree QC, senior partner at McKinney, Bancroft & Hughes, and Brian Simms QC, head of litigation at Lennox Paton and China Export-Import Bank’s lead attorney. Mr Moree’s firm are representing CCA in the Bahamas.

Mr D’Aguilar, meanwhile, suggested that the Government’s unhappiness about being “blindsided” by Baha Mar’s Chapter 11 filing drove it into CCA’s embrace.

“They [CCA] clearly felt the Government could put undue pressure on Baha Mar to comply and accept their terms,” he told Tribune Business. “There’s no doubt the Government was very pro their position at the outset.”

Mr D’Aguilar said the suggestion by Obie Wilchcombe, minister of tourism, that the Government should suspend its Supreme Court petition to wind-up Baha Mar and go back to seeking a negotiated solution, showed some Cabinet ministers were having doubts about the Government’s strategy.

“Clearly, it shows that the decision to wind-up in the eyes of some Cabinet Ministers was not the right one, and has not achieved the goals they thought it was going to achieve,” he told this newspaper.

“They have achieved nothing so far. Personally, I think this whole winding-up petition has been a disaster. This whole process was to speed up the parties coming together, and get the project moving forward. It has done nothing but delay the project even more.”

The Government seemingly thought the winding-up petition would concentrate Mr Izmirlian’s mind, and squeeze him (and Baha Mar) into agreeing to the terms the Chinese wanted.

However, to-date it appears that the Christie administration has underestimated and misjudged the Izmrilians’ ability to “wait out” itself and the Chinese.

Mr D’Aguilar, meanwhile, described the winding-up petition strategy as an “unmitigated disaster” that had led to “the falling apart of the brands” via Rosewood’s decision last week to seek an exit route from the $3.5 billion project.

“The Government has done nothing but complicate and confuse the situation,” he told Tribune Business. “The brands are trying to pull out, trying to get their people out, their people on the ground do not want to be here any more, as they are not being paid.”