The Tribune

ON Saturday, former deputy prime minister Brent Symonette did not agree with his party (FNM) that the Christie government was totally at fault for the recent redundancies of more than 2,000 Bahamians from the Baha Mar payroll.

“I think everyone is at fault,” he told The Nassau Guardian on Saturday. “There’s my side of the story, your side of the story, and the truth in any situation.

“And I think at this point everyone has to share the blame in what went wrong. Getting it out of that mess is another problem. I think we have to move beyond that,” he said.

We agree with Mr Symonette that we have to move forward to prevent the Baha Mar dream from complete collapse.

However, we do not agree with Mr Symonette’s statement that the Christie government is not to blame for much of what has happened. If Mr Christie had been astute, he would have kept his fingers out of the mix, watched from the sidelines and let them duke it out on their own. Too much was at stake — certainly it was too much for Mr Izmirlian to see his dream fail without a good fight.

In our opinion, government’s entrance into the fray — and seemingly calling the shots, even appearing to guide the court from the sidelines — made it more culpable for today’s outcome than it should have been. It gave CCA a sympathetic shoulder to cry on, leading a CCA executive to shrug off any suggestion that the current questioning of his company’s workmanship could destroy its commercial reputation. “This couldn’t happen,” said the executive, “the government of The Bahamas will vouch for our impeccable behaviour and professionalism during the entirety of our engagement at Baha Mar”.

However, this government has fallen so far from its pedestal that we doubt anyone would take its word for anything today. Was it this arrogant confidence of its hold over our government that prompted CCA to proceed with the Pointe construction without even waiting for government’s permits to do so? The Pointe episode has further “yucked up the vexation” of many Bahamians at all levels of society.

All of this has led the Bahamian people to the conclusion that our government is on the side of the state owned bank and construction company. Mr Christie also made matters worse when he questioned Mr Izmirlian’s mental equilibrium, Immigration Minister Fred Mitchell threatened his immigration status, and Labour Minister Shane Gibson suggested a psychiatrist be called in for all potential developers. From that point on, negotiations quickly started a downhill roll.

As we understand it, Mr Izmirlian entered into partnership with the China Export-Import Bank (CEXIM) as the project’s major lender. One of the bank’s conditions of the loan agreement was that China Construction America (CCA) had to be the contractor. In our opinion, that condition of loan-partnership should have raised the red flag for Mr Izmirlian.

But apparently, it did not. He concluded the deal in good faith.

However, since learning of this condition of partnership, Nassau’s infamous sip-sip mill is now circulating the rumour that the bank and construction company are under one ownership. We do know that both entities are state owned with Beijing being the state, but the rumours refer to one individual as the owner. This has not been confirmed. But, if true, we can understand why the bank didn’t have the construction company on the mat for reportedly walking off the job and for the earlier infractions complained of.

Apparently, Mr Izmirlian, as the developer, was not satisfied with CCA’s standard of workmanship. He complained. CCA also complained about non-payment. If there was non-payment it must have been tied to the standard of their work. And that apparently is where the war of words started.

Once CCA walked off the job, it was only a matter of time before Mr Izmirlian would start to feel the credit pinch. He could not continue to pay a staff that was not working. Also government was not paying Baha Mar what it owed. Deputy Prime Minister “Brave” Davis was quibbling over the fee that government owed on a portion of the West Bay Street roadwork, saying that he had to watch the people’s money. It was difficult to understand his argument when the Ingraham government had already entered into a non-negotiable fee of $45.3m towards the construction of the diversion of West Bay Street. Government did not pay this debt. In fact it was this money that government held back that was eventually used to pay staff who were kept on while the court appointed provisional liquidators wrestled with the problem. When the money ran out last week, payment stopped and more than 2,000 staff were made redundant.

With his back against the wall, Mr Izmirlian, in an attempt to save Baha Mar, his staff and his creditors, filed for Chapter 11 bankruptcy in the courts of Delaware. In our opinion, it was a brilliant move to save a threatened resort. If Chapter 11 had gone through, Baha Mar, its staff and creditors, had a good chance of surviving, and, even prospering. But Chapter 11 was not a feature offered by our courts to help a company resurrect itself.

In the United States, there are at least five well known companies that went into Chapter 11 and came out stronger than they went in.

America Airlines, Delta, United and Air Canada would have collapsed if they had not clutched the Chapter 11 life line. Why not Baha Mar? Why wasn’t Baha Mar given a chance to survive?

This is where Mr Christie and his government made its grand entrance, and, in our opinion, today should carry the greatest blame for what is now happening to Baha Mar, its former staff and its creditors. We are satisfied that if Baha Mar had been given a chance to go through Chapter 11, today’s story would have been different, and we would not be writing this editorial.

But, Chapter 11 was the last thing that China wanted to face — it certainly would have informed Bahamians of what went wrong at Baha Mar and who was to blame for all the announced openings that never took place, costing millions in advertising dollars and resulting in ruining the resort’s name. It also damaged the Bahamas’ reputation as a safe place to invest.

The CEXIM and CCA also objected to having the matter heard in the Delaware court. Prime Minister Christie supported their position by maintaining that the Bahamas would lose its “sovereignty” if the US court was recognised. The US court had made it clear that it was willing to work with the Bahamas court. Attorney General Allyson Maynard Gibson was quick to point out that the Delaware court had thrown out the Baha Mar petition. However, she failed to explain that it was not thrown out because Delaware did not think that Baha Mar had a case, but because the judge did not think that going ahead in Delaware would get the sparring parties to the table any sooner. “Sovereignty” was the big bad wolf the Christie government used to close the door on Delaware.

And this is what the Delaware judge had to say on the matter:

“Chapter 11 of the United States Bankruptcy Code, with all stakeholders participating, under these circumstances, would be an ideal vehicle for the restructuring of this family of related companies with the ultimate goal of finishing a project said to be 97 per cent complete and, upon its exit from Chapter 11, to be in sound financial footing, with appropriate treatment of creditors. I am consequently disappointed that the parties have been so far unable to formulate a consensual exit strategy, whether that would involve taking a plan to confirmation or providing for an agreed dismissal as part of a consensual resolution of their disputes.”

And, of course, in September of this year “Big Bad Brad” had to have the last say about the FNM backing Delaware’s Chapter 11 procedure.

“They (FNM) backed the Delaware Bankruptcy Court petition and were proven wrong,” he chortled. “They were critical and scoffed at the government’s petition in the Bahamas Supreme Court to protect the national sovereignty, the employment, and the investment of thousands of Bahamians; they were proven wrong.”

But, Chairman Roberts, where were you, your government and “sovereignty” on Friday, October 23, when more than 2,000 Bahamian staff were made redundant at Baha Mar, and creditors realised that they had lost their investment? Who has been proven wrong now?

And, yes, Mr Symonette, in our opinion the Christie government bears the heaviest burden of blame in this catastrophe by appearing to have snatched the lead role in this tragedy, and clumsily bungled it.

We hope now – for the sake of us all – that “Sovereignty” will start paying the bills.