The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Two major Nassau resorts yesterday faced the renewed threat of liquidation proceedings after a New York court rejected their owner's bid to prevent Sarkis Izmirlian enforcing a $1.642bn damages award.

The New York State Supreme Court's appeals division, in a brief one-page decision, overturned the temporary injunction previously obtained by China Construction America (CCA) and its affiliates that barred Baha Mar's original developer from enforcing the earlier judgment he obtained against the project's contractor.

The verdict returns the Chinese state-owned construction company to its initial position of having to come up with a $1.9bn surety bond if it is to pursue its bid to overturn Mr Izmirlian's damages award for fraud and breach of contract over its failure to complete Baha Mar on time - an outcome that resulted in the project filing for Chapter 11 bankruptcy in the US and the original developer's ouster.

CCA and its subsidiaries have previously asserted that they lack sufficient assets, and have been unable to raise, the necessary security sum. They warned that if no stay, or injunction, was imposed on Mr Izmirlian's ability to enforce his damages award they may be forced to file for bankruptcy and liquidation in the US and Bahamas, respectively.

Such a move would impact both downtown Nassau's British Colonial and Margaritaville Beach resorts, both of which are owned by CCA (Bahamas), and represent the Chinese construction company's major assets. They are said to have a combined value of $355m, which pales against the $1.9bn security that is required.

However, Ryan Pinder KC, the attorney general, today said the Davis administration was not worried by the New York appeals court's decision and its impact as the Government "has to be involved" in whatever developments take place.

"We're not concerned," he told reporters on the sidelines of the official opening of the Family Court. 

"The Government has the mind of the Bahamian people first and foremost. Whatever happens, the Government has to be involved in the process and, ultimately, they have to come to government to effect any kind of Order or any kind of result that they achieve, and the Government - when they approach that - they will approach that with the mindset of Bahamians first," Mr Pinder said.

He added that his office's review of the original verdict that awarded Mr Izmirlian his $1.642bn, a sum that continues to increase with each passing day, has not uncovered anything for the Government to be concerned about.

"We have reviewed the ruling," Mr Pinder said. "We don't see any instances in the ruling that would really point to anything that the Government should be concerned about, and that was the first ruling, so we'll review the court of appeal ruling that just came down and see if that has any implications."