The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar’s contractor has urged the Delaware court not to make any further decisions relating to the Chapter 11 filing, for fear they may be “irreconcilable” with verdicts rendered by the Bahamian Supreme Court.

China Construction America, in calling on the US Bankruptcy Court to “defer” any Baha Mar-related decisions until its bid to dismiss the Chapter 11 case is heard on August 17, warned that any rulings would “do nothing more than create confusion and waste resources”.

The contractor’s call for the Delaware court to “maintain the status quo” is likely designed to allow for the Supreme Court to rule today on whether to recognise the Chapter 11 proceedings, and give them legal effect in the Bahamas.

It may also be intended to give negotiations a chance to succeed, but is more likely designed to encourage the Bankruptcy Court not to give Baha Mar extra negotiating leverage via favourable orders prior to the Government’s winding-up petition being heard on July 31 - should that become necessary.

“Consideration of any additional matters before the motion to dismiss [Baha Mar’s Chapter 11 bid] has been resolved would be inefficient and wasteful, since the debtors’ are also a party to a Bahamian insolvency proceeding,” China Construction America argued to the Delaware court.

“Further relief granted by this court stands not only to be potentially duplicative of the rulings that may be entered in the Bahamas, and therefore unnecessary, but also potentially irreconcilable with those rulings, which will do nothing more than create confusion and waste already scarce estate resources.”

In what effectively amounts to an extension of its argument for the Bahamian courts, not Delaware, to decide the Baha Mar matter should it become necessary, China Construction America said the initial Chapter 11 rulings would “be more than sufficient to preserve value and avoid irreparable harm”.

It alleged: “Because the project is at a virtual standstill, and numerous issues must be addressed in the Bahamas before the project can resume in any meaningful fashion, there is just no compelling reason for the court to authorise any further relief prior to its consideration of the motion to dismiss.”

Arguing again that 14 of the 15 Baha Mar companies have no nexus, or connection, to Delaware or the US, China Construction America suggested that the date for the next key Chapter 11 hearings - August 3 - was “a recognition” that the Supreme Court proceedings needed to be completed first.

“China Construction America is just one of the debtors’ significant creditors that believes that the debtors’ insolvency process does not belong in this court,” it added.

“Since there is already a concurrent insolvency proceeding taking place in the Bahamas, as well as pending objections to the Bahamian court’s recognition of the Chapter 11 cases, the court should not spend its valuable time considering requests for relief which either may or may not be recognised by the Commonwealth of the Bahamas, or which may need to be adjudicated in the Bahamas following dismissal of these cases.”

China Construction America warned that two simultaneous Baha Mar insolvency proceedings would create “substantial harm” to the developer, “the people of the Bahamas and other creditors”.

It added that with its staff locked out of their Bahamas offices, there was “no pressing need” for Baha Mar to move forward with any other claims for Chapter 11 relief, and doing so would only waste money and “cause significant harm to all creditors”.