The Tribune

By KHRISNA VIRGIL

Tribune Staff Reporter

kvirgil@tribunemedia.net

ATTORNEY General Allyson Maynard Gibson, QC, has led a delegation to China where Baha Mar executives, China State Construction and the Export-Import Bank of China are expected to hold discussions on the way forward for the unopened $3.5bn West Bay Street resort.

Despite assuring reporters last Wednesday that he would mediate the discussions between the three stakeholders at a neutral location, Prime Minister Perry Christie did not attend the negotiations, which are scheduled to happen today and tomorrow.

In a press statement released by the government on Saturday, the prime minister was said to remain eager to mediate as requested, however there was not sufficient time to satisfy the People’s Republic of China’s protocol requirements for receiving heads of state.

The news came as Baha Mar CEO Sarkis Izmirlian defended his decision to file for Chapter 11 bankruptcy in the United States, adding that he hoped the other parties involved would see the merit in the choice.

In a letter to employees on July 11, Mr Izmirlian said he remained “confident” in the bankruptcy process saying the orders already received in the US courts create the best path forward toward ensuring the resort can be completed and opened.

Meanwhile, the government’s statement read: “ . . .The prime minister has decided that this meeting is too important to delay.

“To ensure negotiations happen as soon as possible, the prime minister is sending a delegation from the government of the Bahamas, led by Attorney General and Minister of Legal Affairs Allyson Maynard-Gibson, QC, to China to attend the meetings. The parties have requested the presence of the government at the negotiating table. The prime minister will remain fully engaged in this matter and available for consultation by the government of the Bahamas’ delegation or any other party.”

The statement added that representatives from China State Construction and EXIM Bank were not in a position to travel outside of China at this time.

“Over the last several days, the government, led by Prime Minister Perry Christie has organised for negotiations to take place between the parties involved in the development and completion of the Baha Mar resort.

“The government is encouraged by the fact that all three parties have agreed to participate in negotiation meetings scheduled for Monday July 13 and Tuesday July 14,” the statement said.

“It is the expectation of the prime minister that representatives from Baha Mar Ltd, China State Construction Engineering Corporation and the Export-Import Bank of China will negotiate in good faith and with a goal of coming to an agreement that would allow for the completion and opening of Baha Mar as soon as possible.”

The statement added that the Christie administration will continue to be transparent with citizens of the Bahamas on this matter.

In his letter to employees last Saturday, Mr Izmirlian said Baha Mar is committed to finding a consensual way to move the resort forward so that it can be opened as soon as possible.

Bankruptcy

The Baha Mar CEO said as work continues to achieve this objective, many have questioned why Chapter 11 was chosen rather than filing for court protection in the Bahamas.

He said: “The simple answer is that under laws of the Bahamas it is clear that a filing results in winding up or liquidation. That would mean Baha Mar would be liquidated, all the employees immediately terminated, and suppliers paid virtually nothing for outstanding debts.

“There would be no opportunity for Baha Mar to move forward. In contrast, the Chapter 11 process under the US Bankruptcy Code protects Baha Mar and all of its parties by providing an opportunity to restructure, instead of liquidating, and provides an opportunity to work with other parties to reach a mutually agreeable approach that will allow us to move forward.

“Of course, we would have wanted to file in the Bahamas if we could have received the same protections that we do under the US law that allow us to accomplish our objectives.

“I remain confident that the Chapter 11 process we’ve undertaken, and the orders we already have received in the US Bankruptcy Court, creates the best path forward toward ensuring that Baha Mar can be completed and opened. We are also hopeful that other involved parties are beginning to gain a better understanding of the Chapter 11 process and realise that it is best way for Baha Mar to succeed.”

The Supreme Court has yet to ratify an order by a US judge allowing Baha Mar to access $80 million in debtor-in-possession financing.

Last Tuesday, the Supreme Court set down the Baha Mar matter until July 20, with an in chambers status hearing set for July 14. The matter was adjourned at the request of Baha Mar so all sides could get back to the negotiating table.

However, in his letter to staff, Mr Izmirlian said until the Supreme Court grants the necessary approvals, the resort remains unable to access proposed financing, making it impossible for Baha Mar to pay salaries and benefits to employees, as well as pay ordinary course suppliers and vendors for goods and services post the commencement of the Chapter 11 process.

He said: “We may reach an agreement before the scheduled hearing on July 20, but in the event we are unable, we hope to secure recognition from the Bahamian Supreme Court for our Chapter 11 process, so that we can move forward with the process to protect Baha Mar’s future and pay you, our team.

“In addition, we are seeking payment from other sources that owe Baha Mar money that would permit us to meet these obligations.”

Mr Izmirlian reiterated that if Baha Mar cannot reach an agreement with the other parties involved, officials will have to make extremely difficult decisions that would include workforce reductions.