The Tribune

By NICO SCAVELLA

Tribune Staff Reporter

nscavella@tribunemedia.net

STATE Minister for Finance Michael Halkitis yesterday defended the Baha Mar receivership from attacks against the resort’s developer Sarkis Izmirlian, saying the process is a way for “the speedy resumption and completion of the resort.”

The Golden Isles MP also dismissed assertions from Mr Izmirlian that the government was more focused on “legal and political manoeuvres” than pushing for a solution to the Baha Mar crisis.

He said that Mr Izmirlian’s statements were those of “obviously someone who has put a lot into the project, and the development has not gone the way he intended it to go.” He added that Mr Izmirlian “might be feeling a bit disappointed and manifesting that in his statements.”

Last Friday, the Supreme Court granted a request from the Export-Import Bank of China to appoint Deloitte and Touche as receiver of Baha Mar.

On Monday, Mr Izmirlian said the move is a part of a pattern of “disastrous actions” taken by the government and Baha Mar’s Chinese stakeholders this year.

In a statement released by BMD Holdings, Mr Izmirlian also criticised the Christie administration and the resort’s Chinese stakeholders, accusing them of being “more focused on legal and political manoeuvres than on solutions.”

“I think he has his point of view,” Mr Halkitis told reporters yesterday. “It’s an investment he had. Everybody’s familiar with the developments. Obviously he would have preferred a different outcome. We don’t share the view - we think this is a way to get to a speedy resumption and completion of the resort.

“There were many efforts for a negotiated settlement between the developer, the bank and the construction company. The government was a facilitator. So I think obviously he would have preferred a different outcome. We don’t share the view. We think this is a way to get the resort completed, opened, Bahamians to work.”

He added: “(He is) obviously someone who has put a lot into the project, and the development has not gone the way he intended it to go. And so he might be feeling a bit disappointed and manifesting that in his statements.”

Last week Friday, Deloitte and Touche Managing Partner Raymond Winder and the firm’s partners from China were appointed Baha Mar receivers on behalf of the Export-Import Bank of China, which is Baha Mar’s secured creditor through its $2.45 billion mortgage debenture.

The move effectively sidelined Mr Izmirlian from the project he created and in which he had invested $850 million.

When questioned if he feels Mr Izmirlian is now an “outsider”, Mr Halkitis said: “I couldn’t say.”

“I think obviously he has been the founder, the visionary behind all of this,” he added. “And all of us hope that we can get to some situation where there can be a solution that satisfied everybody, and obviously we’ve come a long way along this process. And I think that the bottom line is, I think everybody’s concern is just wanting to see the resort started, the construction resumed, the resort completed and operating and people working. Of course nobody would like to see someone who has invested so much be completely out, so we hope that is not the case.”

On Monday, Minister of Agriculture and Marine Resources V Alfred Gray said Prime Minister Perry Christie remains optimistic that construction will begin within the next six to eight weeks to complete the project. Mr Gray added that he would be “surprised” if the mega resort did not open by May 2016.

The Supreme Court’s appointment of a receiver to Baha Mar is the latest consequence of a dispute that brought the project to a standstill in June, culminating in more than 2,000 employees being made redundant in late October.

After the Supreme Court’s ruling on Friday, Mr Winder said receivership would allow for the continuation of the process started by the resort’s court appointed liquidators.

On June 29 Baha Mar filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court of Delaware for 15 of its companies.

In September, however, US Judge Kevin Carey threw out the Chapter 11 cases for Baha Mar’s Bahamian companies. Government had objected to them being heard in the Delaware court because, it claimed, it would have breached the Bahamas’ sovereignty.

“Chapter 11 of the United States Bankruptcy Code,” said Judge Carey, “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.”

On this decision it was left to the Bahamas court.

After the bankruptcy filing, the government filed a winding up petition in the Supreme Court against the resort. The Supreme Court then appointed joint provisional liquidators to oversee the resort.

On the request of the Chinese partners, the liquidators were replaced by receivers.