The Tribune

By KHRISNA VIRGIL

Tribune Staff Reporter

kvirgil@tribunemedia.net

DEPUTY Prime Minister Philip “Brave” Davis has defended the Christie administration’s decision to pay the salaries of 2,400 Baha Mar employees amid growing criticism that the government did not come to the aid of thousands of Bahamians who have previously lost their jobs.

Justifying the move, Mr Davis told reporters yesterday that while the government was empathetic to the plight of those who have been laid off, Baha Mar is an enormous undertaking that would be more devastating to the country if it were to fail.

He said that despite Baha Mar’s promise to pay the workers for a period, the payment would come with conditions. These conditions would have seen the employees used as “pawns” as court hearings play out in the coming weeks, he said.

The minister of works was asked to respond to critics who have insisted that the government was setting a dangerous precedent by footing Baha Mar salaries for the pay period ending July 3.

Hundreds of Bahamians were laid off when the food store chain City Market went belly up in 2012. To date there has been no severance package settlement despite repeated calls from former employees to be paid what they are owed.

The CLICO (Bahamas) fiasco is another situation that has not found resolution. Around 13,000 policyholders and pensioners have been left in limbo since 2009, when the company became insolvent. The government has not delivered on its long-promised $30m guarantee for CLICO.

“I think a distinction has to be made between the Baha Mar (situation) and those other businesses,” Mr Davis said yesterday, at a press conference at the Ministry of Works.

“Whereas we feel the pain of all workers (but) in the context of Baha Mar it is a huge and an enormous project that will have a more devastating impact on the economy. I think different considerations have to be given in that regard. I think there is a distinction to be made.”

He continued: “I think the decision to pay the employees was predicated on the fact that Baha Mar’s desire to pay them had some conditions attached. One of the things that the government did not wish to have, I think, was to have the workers used as a pawn in negotiations going forward in trying to resolve the issues that impact the completion and opening of the Baha Mar resort.

“So as the discussion continues to bring about a resolution to the overarching objective on completing the project and having it open as quickly as possible we needed to ensure that these matters that impact the employees did not distract from that goal.”

Last week, Attorney General Allyson Maynard Gibson said the government will pay the salaries of the workers this month as negotiations over the fate of the stalled $3.5bn project continue.

The decision came after the Supreme Court adjourned a hearing into Baha Mar’s application for local judicial recognition of its Chapter 11 filing in a US bankruptcy court until Tuesday.

That came after Baha Mar had received the green-light from the US court to start tapping into $80m in debtor-in-possession funding, $30m of which was to be used over a 30-day period.

Last week, Judge Kevin Carey granted Baha Mar permission to pay some $4.4m in staff wages and benefits that were due prior to the resort developer’s $3.5bn filing for Chapter 11 bankruptcy protection. The resort also obtained Bankruptcy Court authorisation to pay almost $2m in severance monies, with July 20 seemingly set as the date that will determine the fate of several thousand employees.

However, the Supreme Court adjournment meant the developer could not access this money or pay employees.

On Thursday, Mrs Maynard-Gibson said that the Hotel Corporation of the Bahamas was prepared to make the Baha Mar salary payments for this month.

According to court documents filed in support of Baha Mar’s bankruptcy, salary payouts average $7.5m a month.

The Tribune understands the government is paying the workers for the bi-monthly pay period, a total sum of around $2m, which is expected to be paid to employees today.

It is unclear if the government will continue to pay Baha Mar’s salaries if the matter is not soon resolved.

Prime Minister Perry Christie has said Baha Mar CEO Sarkis Izmirlian’s decision to file for Chapter 11 bankruptcy came without notice last week Monday.