The Tribune

THE bankruptcy judge hearing the Baha Mar Chapter 11 filing in Delaware on Friday outlined two possible middle-ground rulings on whether to dismiss the resort developer’s case and said he would present his decision as soon as possible, likely next month, according to report in The Wall Street Journal.

Judge Kevin Carey, heard arguments Friday on motions from two Chinese national companies - its lender, the Export-Import Bank of China, and its contractor, China Construction America (CCA) - that want the case decided in a Bahamian court.

Judge Carey presented two possible alternatives to a simple confirmation or denial during the hearing: allowing the case to continue but requiring the Bahamian court to approve the bankruptcy plan as a stipulation for its confirmation, and suspending the proceeding rather than dismissing it outright.

While he considers his decision, Judge Carey urged the parties to return to negotiations. “Whatever either court decides doesn’t seem to me to change the underlying economic reality of getting the project up and running,” Judge Carey said, referring to the Supreme Court’s decision on whether to dismiss that proceeding or appoint a liquidator which is due on September 4. “Keep talking,” he added.

Baha Mar’s lawyer argued during the hearing that dismissal of the case would be fatal to the stalled $3.5 billion Cable Beach project and added that an affirmative ruling and the possible appointment of a mediator would bring the parties back to the negotiating table. He said the company believes that the government would ultimately support a restructuring that was confirmed by the US court.

Lawyers for CCA and the Export-Import Bank argued that Judge Carey should dismiss the case because the court deciding the case’s matters needs to have jurisdiction over the government of the Bahamas, which the US court doesn’t. It also raised doubt that the government would fall in line, given its previous actions that include urging the court in the Bahamas not to recognise the US proceeding and filing a liquidation case for the company.

Baha Mar filed a restructuring plan with the US court on Wednesday that leaves most of the current debt untouched and proposes securing exit financing to complete the project, although it hasn’t secured any yet.

Judge Carey called the plan “aspirational” during the hearing but added that the feasibility of the proposal currently isn’t before the court.

Baha Mar filed for bankruptcy in the US on June 29, claiming $2.7 billion in debt. Construction on the project, reported to be 97 per cent complete, has halted.

More details, see Tribune Business on Monday