The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government and Baha Mar remained far apart yesterday on their interpretations of the provisional liquidation ruling’s impact, as the developer started to “educate” the Supreme Court’s appointees on the intricacies of the $3.5 billion project’s predicament.

Documents filed with the Delaware Bankruptcy Court confirmed that Baha Mar had begun to brief the joint provisional liquidators, Bahamian accountant Ed Rahming, a partner in KRyS Global (Bahamas), and two UK accountants, Mark Cropper and Alastair Beveridge of AlixPartners Services, on the development’s financial condition and associated litigation.

“The PL entities and their professionals have been meeting with the provisional liquidators to educate them about the Chapter 11 Cases, the Bahamian proceedings, Baha Mar and its assets and liabilities, and the project generally,” Baha Mar said in an update to the Delaware court.

“ The PL Entities are also developing proposed protocols to facilitate the provisional liquidators’ ability to discharge their duties in accordance with the ruling, including granting the provisional liquidators access to information about the PL entities’ assets and the project, and continuing to educate the provisional liquidators on all aspects and intricacies of the project.

“The protocols are intended to harmonise and coordinate activities in the various insolvency proceedings; promote the orderly and efficient administration of the insolvency proceedings; honour the independence and integrity of the involved courts (while not requiring any court to take any action inconsistent with its obligations under applicable law or requiring any party to breach its fiduciary obligations); and implement a framework of general principles to address basic administrative issues arising out of the cross-border nature of the insolvency proceedings.”

The ‘PL Entities’ are the seven Baha Mar companies that Justice Ian Winder on Friday found were insolvent, namely Baha Mar Ltd; BMP Golf Ltd; Baha Mar Land Holdings Ltd; Baha Mar Properties Ltd; BMP Three Ltd; Baha Mar Enterprises Ltd; and Cable Beach Resorts.

The Government, meanwhile, touted the appointment of the joint provisional liquidators and their powers as effectively giving Mr Rahming and his UK colleagues complete control over all Baha Mar’s finances.

“The ruling gives the joint provisional liquidators the power to take control of all bank accounts and other assets of Baha Mar. In effect, and until a court-approved plan for the completion of Baha Mar is established on November 2, 2015, the independent court supervised liquidators retain financial control of Baha Mar,” the Government said.

It added that Justice Winder’s ruling recognised that Baha Mar’s value was diminishing every day it remained incomplete, and that the verdict “provides a framework to secure a court-approved plan for completion and opening of Baha Mar and, in so doing, could pave the way to the timely completion and opening of the resort”.

In promising, like Baha Mar, to fully co-operate with the provisional liquidation team, the Government added: “The ruling offers a road map to a timely resolution of the matter.

“In addition to ensuring that the Bahamian assets will be controlled by the independent joint provisional liquidators under the supervision of the Bahamas Court, it provides a time-limited window to establish a plan for the resumption, completion and opening of the resort under private ownership and operation.”

The Government’s statement then ended with a quote by Allyson Maynard-Gibson, the attorney general, which said: “This approach is in our national interest.

“It provides a strong mechanism to protect the full value of investments by Bahamian creditors, while putting the project in a position to deliver on its promise, which is to generate job creation while delivering a world class tourist experience.”

However, Baha Mar contacts, speaking on condition of anonymity because they were not authorised to deal with the media, said the joint provisional liquidation appointment and associated powers were of “no real concern”.

They explained that since the seven Baha Mar entities were insolvent, they had little to no cash in their bank accounts for Mr Rahming and his UK colleagues to watch over and administer.

These contacts suggested that the joint provisional liquidators would probably have to seek guidance over how to use the monthly ‘Bahamian salary payments’ that the Government is making to Baha Mar staff from the roads monies, but they emphasised that the appointment and associated powers would not impact the financing or conduct of the Chapter 11 cases.

“It’ll still be a continuation of the same old, same old. There’s no real change,” one Baha Mar contact said.

They also contradicted the Government’s statement by saying Baha Mar had yet to receive by yesterday afternoon the Supreme Court Order setting out the provisional liquidators’ powers.