The Tribune

By NICO SCAVELLA

Tribune Staff Reporter

nscavella@tribunemedia.net

THE estimated $7.5 million used to foot the bill to pay the salaries of Baha Mar workers was deducted from funds the government was holding for Baha Mar and not an unsecured government loan as reported, State Ministers of Legal Affairs Damian Gomez said yesterday.

Mr Gomez said the money was not coming from the “consolidated fund as a bill from the government,” but rather as a deduction of funds the government is holding for Baha Mar in connection to the $21m owed to Baha Mar to cover the government’s portion of costs for roadwork associated with the development of the resort.

Mr Gomez’s statements came in response to reports that the $7.5m was being treated as an unsecured loan to Baha Mar, as outlined in a letter from the Office of the Attorney General. The letter was addressed to Baha Mar President Tom Dunlap and signed by Director of Legal Affairs Antoinette Bonamy.

However, Mr Gomez said: “What happened was we admitted that we owed $21m and had made a payment to them, which they returned to us because it wasn’t convenient to them to hold it. So we were holding their money for them. In any liquidation in the Bahamas the wages of employees are regarded as a first charge on the estate of the company. We, in our letter to them, indicated that we regarded the payment of salaries to employees, which was outstanding, to be their obligation and advanced that money to their staff on that basis.

“That is not government money, that is money deducted from monies the government was holding for them.”

On June 29, Baha Mar Ltd, and 14 affiliated companies involved with the $3.5b mega-resort, filed for Chapter 11 bankruptcy in a Delaware court.

The next day, Prime Minister Perry Christie said the filing came “without notice” to the government.

Baha Mar subsequently told more than 2,000 of its workers not to return to work until further notice, but pledged that it would pay salaries and benefits for a period as it awaited court hearings on its Chapter 11 bankruptcy claim.

The government subsequently intervened, opting to foot the estimated $7.5m monthly bill required to pay the salaries of the workers, so that workers would not be used as “pawns” in Baha Mar’s bankruptcy filing.

The workers were to be paid for the period ending July 3. The Tribune understands that the workers were paid on Tuesday.

Yesterday, it was reported that the $7.5 million put up by the Christie administration was being treated as an unsecured loan to Baha Mar.

However, Mr Gomez said yesterday: “We were holding money that was due to Baha Mar, and all we’ve done is deduct from that and pay the staff. It’s not coming from the consolidated fund as a bill from the government.”

On Tuesday, Prime Minister Perry Christie said he has set a date for this weekend to hold mediated discussions at a mutually agreed location with Baha Mar executives, its general contractor China Construction America, and the China Export-Import Bank. He also urged Baha Mar to quickly accept the invitation.

That came hours after the Supreme Court accepted an adjournment request by Baha Mar’s legal team into a hearing on whether the court will ratify a US bankruptcy court’s approval to allow the resort to access debtor-in-possession financing as part of its shock Chapter 11 filing last week.

The new round of discussions, Mr Christie said, will convene on an urgent basis with a view to developing a way forward that would see construction at the West Bay Street property resume immediately.