The Tribune

LAST Wednesday, Attorney General Alison Maynard-Gibson, government’s lead negotiator in attempts to have the stalled Baha Mar resort completed for opening, invited those who do not think the government “has been working in the best interests of the Bahamian people… to put their glasses on”. Those who do not see government’s valiant attempts “are deliberately trying to mischaracterise what the government is doing,” she said.

We have put our glasses on, taken them off and put them on again, backwards and upside down, yet we do not see what the Attorney General claims she sees.

For us, Baha Mar is a very simple, but tragic story.

The $3.5 billion Cable Beach resort, promised to be the largest and most luxurious in the Caribbean, was already getting rave reviews in anticipation of its opening in December 2014.

And then something went wrong. Obviously the contractor had misread his calculations - he was running behind schedule. So came the first postponement. A new date was set for March 27, 2015.

However, two days before the promised opening, Baha Mar made an announcement that left everyone in shock.

“In setting our opening date for March 27, we relied in good faith on the representations of the resort’s construction manager and lead contractor,” said the statement. “Last Friday, based on this party’s repeated assurances, Baha Mar announced that it would begin a paced opening beginning March 27, and culminating in its grand opening scheduled for early May.”

Continued the statement: “Subsequently, it has become clear that the contractor has not completed the work with an attention to detail consistent with Baha Mar standards of excellence.

“Anything less than a world-class facility and best-in-class guest experience is not acceptable to Baha Mar. As a result, Baha Mar will not begin its paced opening on March 7.”

March was off, but the “grand opening” was still on for the month of May. In anticipation, bookings were being taken, even a sumptuous wedding was to be among the first events for the fabulous Baha Mar.

Eventually everything had to be cancelled, leaving disappointed guests, a ruined wedding event and the myth of Baha Mar rudely brought down from its pinnacle. If and when the resort does open, rebuilding its reputation is going to be an uphill struggle.

China State Construction (CCA), the contractor, had walked off the job. Baha Mar’s doors were closed.

On June 9 — a mere three months later – his back now against the wall and his 13-year dream facing a bleak future, Sarkis Izmirlian, Baha Mar’s chairman and Chief Executive officer, made a bold decision. It was his last chance to save his resort and what was owed its creditors.

He explained that “the general contractor repeatedly has missed construction deadlines. This has caused both sizeable delay costs and forced the resort to postpone its opening. Unable to open, the resort has been left without a sufficient source of revenue to continue our existing business.”

Baha Mar’s Board of Directors then announced the decision to go into voluntary liquidation under Chapter 11 of the US Bankruptcy Code in Delaware.

In such a situation, it was the smartest move that the directors could make. Secrecy was of the utmost importance. But it was this secrecy that rattled the nerves of government, and so miffed the Prime Minister that he questioned whether Mr Izmirlian was still of sound mind.

Government decided to fight the move. Sovereignty was the red herring. It was claimed that to go to Delaware would have had “serious and far-reaching implications” to The Bahamas’ sovereignty. In our opinion, it would have had no such thing. What Delaware had to offer, would not only have protected the resort, but all of its creditors and given it a chance to rebuild and if successful eventually pay its creditors 100 per cent of what they were owed. The Bahamas could only liquidate and shut down, it could not offer what Delaware had. The Delaware court certainly recognised this country’s sovereignty. It did our country the courtesy of enquiring whether our courts would recognise its ruling – in other words could they work in tandem? So the red herring of sovereignty was only playing to inferiority complexes. If the two jurisdictions were allowed to work together — the Bahamas and Delaware — Baha Mar could possibly have been open and flourishing by now. But government put its foot in the door and blocked the move. The Prime Minister has insisted that everything government is doing is in the best interest of the Bahamian people. But is it? Bahamians are still jobless and Baha Mar is closed. In the meantime, China Construction Company (CCA), which stopped construction at Baha Mar, thus shutting it down, is happily working on its own project at Le Pointe, the British Colonial Hilton in downtown Nassau. The Chinese are working on a project that was not meant to start until Baha Mar was completed. The Bahamians are still waiting to go back to work. Whose side is the government on?

It was then that the flights to Beijing started, with Attorney-General Alison Maynard-Gibson leading the team. The Bahamas was not dealing with a private Chinese company, but rather with the state of the Republic of China. This is the subtle fly in the ointment that has upset the Bahamian people.

The Beijing talks failed. It was back to the local court. In giving his decision, Mr Justice Ian Winder appointed liquidators to protect the assets, while negotiations continued behind the scenes.

However, the judge made it very clear that “provisional liquidation under the Companies Winding Up Amendment Act was not intended for the long term management of an asset like Baha Mar… provisional liquidation is an interim measure whilst the process to liquidation proceeds,” he said. The court has given the principals until November 2 when a decision will be made whether or not to liquidate the resort.

Mrs Maynard-Gibson took exception to former attorney general Carl Bethel’s assessment that the decision “figuratively places a loaded gun to the head of the developer”. We agree with Mr Bethel.

She said that “remobilisation” is the best chance for the contractors to be paid 100 cents in the dollar. “Remobilisation means that your outstanding sums would be paid. That’s very important. But it’s also important in that context to note that the restructuring plan that the developer has filed in Delaware does not contemplate the payment of 100 cents on the dollar. It contemplates 10 cents or so on the dollar and over five years,” said Mrs Maynard Gibson.

This is not true. In Delaware, if successful, it would have given creditors 100 per cent return. Liquidation certainly would not. The judge made it clear that he was talking about liquidation, not “remobilisation“. In this scenario Bahamian creditors would be lucky if they even got 10 cents on the dollar.

Although under Baha Mar’s contract it cannot replace CCA, which had underperformed, but it can bring in qualified Bahamian contractors to complete the job and bill CCA for the work. This would be the fastest way to get the resort opened. This is what government should be supporting if it were on the side of Bahamians.

In our opinion, the Chinese company, which created the problem, is the only winner. The Prime Minister and Attorney General say they are for the Bahamian people. We shall now let the Bahamian people decide.

Today, Baha Mar is still closed and facing liquidation. Bahamians are unemployed, some, having left good jobs, now looking for new employment. CCA, which closed down Baha Mar when it refused to complete, is still working on its own projects in downtown Nassau.

It is now for our readers to decide whose side our government is on.