Baha Mar’s original developer Sarkis Izmirlian.
By KHRISNA VIRGIL
Tribune Staff Reporter
kvirgil@tribunemedia.net
BAHA Mar CEO Sarkis Izmirlian has said the resort’s new plan of reorganisation presents a viable framework for when the $3.5bn development emerges from its ongoing Chapter 11 bankruptcy case.
This reorganisation, the developer said, will facilitate the expeditious resumption and completion of Baha Mar. It also calls for the rejection of its construction contract and all other claims with China Construction America (CCA), and its parent company China State Construction Engineering Corporation (CSCEC).
When contacted for comment yesterday, Free National Movement Deputy Leader Peter Turnquest said the move was “smart” because the events that have unfolded in recent months have destroyed a once amicable relationship between the two entities.
In a letter to Baha Mar’s employees on Friday, Mr Izmirlian wrote that the plan provides for valid claims of Bahamian creditors and the government of the Bahamas to be unaffected by the Chapter 11 bankruptcy case. He said upon implementation of the plan, the creditors would be paid in the ordinary course of business.
“This past week we have turned our primary focus to the ongoing Chapter 11 process before the US Court in Delaware,” he wrote.
“Today, Friday, the US court heard arguments from a number of parties, including Baha Mar, regarding the motions to dismiss the Chapter 11 cases filed in July by China State Construction and China Exim Bank. I believe we made very sound arguments for these motions to be denied by the court. At the conclusion of the hearing, the US court said it would not expect to rule on this motion until some point in mid-September.”
He continued: “To enable the Chapter 11 case to proceed expeditiously, on Wednesday the affiliated entities of Baha Mar that commenced the Chapter 11 cases filed with the US court their joint Chapter 11 Plan of Reorganization.
“The plan is an important step forward in Baha Mar’s restructuring effort. It presents a viable framework for Baha Mar’s emergence from Chapter 11 and the expeditious resumption and completion of Baha Mar so that Baha Mar can open successfully as soon as possible. Most notably, the plan provides that valid claims of Bahamian creditors and the government of the Bahamas will be unaffected by the Chapter 11, and upon implementation of the plan, would be paid in the ordinary course of business.”
“We have said from the time at the end of June when we voluntarily undertook the Chapter 11 process, that it is the best path forward for Baha Mar, our employees, business partners and others, as well as the Bahamas.
“We know the government too wants Baha Mar to succeed and we remain hopeful that the government of the Bahamas will work with us. We believe working together with the Government and CEXIM bank best serves the interests of all parties,” Mr Izmirlian said.
Meanwhile, Mr Turnquest sided with Mr Izmirlian saying the resort’s bid to remove CCA as its general contractor was the right thing to do.
He said: “It is an absolutely smart move. I think they have difficulties with the relationship and there is no trust. There has been enough talk it is now time to do what needs to be done.”
On Friday, the bankruptcy judge hearing the Baha Mar Chapter 11 filing in Delaware 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 – Baha Mar’s lender, the Export-Import Bank of China, and its contractor, China Construction America (CCA) - that want the case decided in a Bahamian court.
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 appoint a liquidator, which is due on September 4.
“Keep talking,” he added.
Baha Mar announced that it was filing for Chapter 11 bankruptcy protection on June 29.
The resort blamed opening delays on CCA.
Once completed Baha Mar is projected to generate nearly 5,000 new jobs for the Bahamas and have an annual payroll in excess of $130 million, representing nearly 12 per cent of the GDP.
Comments
ObserverOfChaos 9 years, 2 months ago
So there is actually some politicians that can speak on their own and make sense? Wow....what next?
Wideawake 9 years, 2 months ago
Baha Mar's New Plan is obviously carefully crafted by experts and many feel it will succeed ...but only, obviously, with the full support of The Bahamas government. Firing CCA and having the remainder of the work done by Bahamian contractors would certainly boost the local economy, lift everyone's spirits and ensure that Nassau regains some measure of optimism regarding our country's future!
The Bahamas government have not told us what their current plan is, or even whether or not they still have a plan. Their original plan of countering Baha Mar's Chapter 11 filing with the "slap dash", "procedurally flawed", winding up action, has obviously back-fired. They initially sided with CCA against Baha Mar, and now if they give Baha Mar's Plan their blessing, that may be seen to be deeply insulting to their CCA friends, and may also upset the newly announced "The Point" development and whatever other deals are in the making.
If The Bahamas government sticks to their original plan and follows through with the winding up, even in a less forceful manner, we could all be in for a long, long wait until we see the Baha Mar debacle resolved. In all probability there will NEVER be a happy outcome and Baha Mar could be in "mothballs" for years!
Sometimes governments look their best when they admit that they were wrong, change their mind, and push on with the solution and outcome that obviously provides the most benefits for the greatest number of their people. Will this PLP government be big enough to eat a slice of humble pie and accept The New Baha Mar Plan? Do they REALLY have a choice?
TruePeople 9 years, 2 months ago
the sad part is canning CCA and hiring a local construction firm was what Izzie wanted to do from long time...... wonder if it was those with 'bahamian's best interests in minds' that blocked him from doing that.....
Wideawake 9 years, 2 months ago
You are right, there should have been a major " showdown" in early 2014, when it was obvious to many that the project could never open on time. Too much leeway was given, and when suspicions re shoddy work first arose, this is when and where problems should have been dealt with.
If CCA had to be dumped, it would gave been SOOO much better to do this before staff were hired and the pre-opening publicity started. However, hindsight is always 20/20 vision!
Bahamian_in_London 9 years, 2 months ago
The FNM really need to be a strong opposition and fully support the reorganisation plan filed under Chapter 11.
This would force Christie to at least engage on this topic, rather than remain in silent while his attack dogs Mitchell et al spout nonsense (that somehow doesn't represent the official position of the Government!!)
Wideawake 9 years, 2 months ago
But if the Opposition were to get on board and wholeheartedly endorse The New Baha Mar Plan, wouldn't that make it even harder for PGC to accept the plan??
We know that our Prime Minister CAN re-consider and change course, ("swimming in vomit"), but can he, even with his incredible negotiating skills, embrace The New Deal, put the Christie "spin"on the Baha Mar debacle, and do sufficiently well at this, to come out smelling like a rose???
History would perhaps judge him more kindly for his change of position, but the Bahamian voters in the 2017 General Election probably would not!!
TruePeople 9 years, 2 months ago
well PLP supporters will believe and side with him no matter if he was saying cats are dogs while he's travelling first-class backwards on the back of a flying pig (while doing the perry shuffle ofcourse).
we've seen proof of PLP loyalty already.
WE expect our leaders to do things based on election positioning.... which says alot..... we SHOULD be expecting them to do what's best for the country...... but I don't see anyone who expects that
Wideawake 9 years, 2 months ago
Perhaps the best chance for the PLP to be elected, is for PGC to support Sarkis, even if that means hanging CCA out to dry, and then do everything possible to get Baha Mar open!
Nothing else will do,.......and even this may not be enough!!
TomMariner 9 years, 2 months ago
No chance! The Chinese government will fight back with every political and financial tool at its disposal. There is a concerted effort to gain a foothold in this hemisphere, and a couple of billion dollar project is just a part of it.
I sure wish CCA had relied on local craftsmen from the Islands or from the big country to the West rather than flying in whole villages from China, but cranking up those efforts from scratch will be difficult. I wish that CCA had reacted sooner and with less ego to correct the obvious flaws in its plan.
But Godspeed! If the BahaMar can achieve its dream of being a counterpoint to the spectacular Atlantis, it will help the Bahamas as a destination.
Wideawake 9 years, 2 months ago
Baha Mar was intended to be China's "signature project" in this region. They MUST find a way to get the development completed or their credibility, locally, regionally and globally will take a serious nose-dive!! In the final analysis the fault must be borne by the guilty party.
If CCA did shoddy work, and failed to complete construction on time as Baha Mar asserts, they HAVE to be made to take responsibility for their transgressions. I think the Chinese government are probably much more infuriated with CCA and ashamed of this monumental failure than many other governments would be. "Saving face" is extremely important in Chinese culture and Beijing won't take kindly to charges that a company with close ties to them acted in a way to bring shame and derision to their country.
The only solution is for CCA to be dumped and CEXIMB to provide the additional financing needed, thereby allowing the Chinese participants to save face and benefit from the project's eventual success.
GeorgiaBAHAMIANwannabe 9 years, 2 months ago
you realize that CCA and CEXIMB are both essentially the same as they're both controlled by the Chinese government right?
sheeprunner12 9 years, 2 months ago
Bahamar has exposed the dirt laundry of the Chinese global economic strategy that is intended to buy up as many vulnerable developing countries to gain geo-political advantages .......... Izzie refuses to lay down and play dead even if it exposes the Chinese and Bahamian politicians .................. that is why the other parties are so pissy mad right now
GeorgiaBAHAMIANwannabe 9 years, 2 months ago
Remarkably very little has been said about the fact that the chinese government controls both the lender and general contractor here.
GeorgiaBAHAMIANwannabe 9 years, 2 months ago
If the developer spent 1/2 the time and energy on developing the project as he has on his BK fifiling and associated public relations campaign Ba Ha Mar would be a thriving resort with thousands of customers and employees instead of creditors. He's likely regretting the deal he made with the devil i.e, the Chinese government who of course controls both the contractor and the lender.
marrcus 8 years, 4 months ago
"Ok so Steve Mckinney just reported that CCA owns Bahamar.....yes ppl the Chinese Construction Company.the SAME one in that owns the HILTON.....they are the "NEW OWNERS". And he goes on to say the Chinese has demanded a list of FIFTEEN things of which 13 sign off already. Some we have already heard like they don't want to pay custom duty, no VAT no casino tax, they are demanding 500 BAHAMIAN citizenships for 500 CHINESE BILLIONAIRES. But wait for it guys....they have demanded 1200 NEW WORK PERMITS for Chinese workers AND....are you listening AND half of the THREE HUNDRED plus MILLION it will take to finish BAHAMAR. Yes ppl they not only want tax exemptions, work permits and citizenshipssss... They want us to pay to be GOOSIED. Let's pray Steve Mckinney is wrong...oh yeah it was also mentioned that the Chinese has been given A BAHAMIAN island off Acklins to harvest Cascarilla tree/bark.. the thing used in perfumes. And YUP you guessed it NO BAHAMIANS ALLOWED!!! But we still believe in YOU though...mmmm "
Sign in to comment
OpenID