The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A former Baha Mar director yesterday urged the Government “to stand on the side of the person that is right” while demanding the project’s contractor “do the honourable thing” and pay Sarkis Izmirlian some $1.7bn.

Dionisio D’Aguilar, who sat on the project’s Board under the original developer prior to its ill-fated Chapter 11 bankruptcy protection filing, told Tribune Business that China Construction America (CCA) and its affiliates should bring “this whole sad process” dating back almost ten years to an end rather than mount a fresh legal appeal.

Speaking after the New York State Supreme Court’s appeals division “unanimously dismissed” the Chinese state-owned contractor’s bid to overturn the initial verdict that awarded Mr Izmirlian some $1.642bn, after finding sufficient evidence it had perpetrated a fraud and breach of contract that caused the initial Baha Mar project to collapse, he suggested that Beijing’s “coffers” should be tapped to finance the payout.

And, asserting that yesterday’s appeals ruling has “100 percent vindicated” Baha Mar’s original developer, Mr D’Aguilar told this newspaper that the Davis administration needs to side with the party that has been proven right in multiple court verdicts. He argued that it was “not advisable”, and “not in the best interests of the country”, for the Government to seemingly continue siding with CCA.

Suggesting that CCA’s US affiliate, one of three entities held liable to pay a damages award now estimated by Mr Izmirlian himself to have increased to $1.7bn, will likely “sit behind” its Chapter 11 bankruptcy protection in New Jersey, Mr D’Aguilar said: “In this whole, sad process, CCA has been found guilty of fraud and breach of contract.

“Mr Izmirlian has won in the lower courts, he has now won on appeal, and CCA should now settle. It’s a state-owned company. It’s owned by the People’s Republic of China, and it should pay. It’s a government that owns that company, they broke the law and, when you break the law, they should pay. They should go into the coffers of the People’s Republic of China and settle and pay out at least.”

The three CCA affiliates, which also include two Bahamian-domiciled entities, CCA (Bahamas) and CSCEC (Bahamas), struck a defiant tone following yesterday’s New York appeals court ruling by asserting “this is not the last word on this matter” and signalling they intend to fight to the end in the courts with another US legal appeal.

However, Mr D’Aguilar yesterday argued that CCA’s battle with Mr Izmirlian has dragged on long enough given that end-May/early June will mark a decade since the ill-fated Chapter 11 filing by Baha Mar’s original developer in a last-ditch bid to retain control of the project and prevent his ouster by the contractor along with Chinese state-owned financier, China Export-Import Bank.

“This breach of contract and fraud was committed almost ten years ago,” the ex-minister of tourism and aviation told Tribune Business. “Mr Izmirlian has had his day in court and prevailed, and he should now expect to be reimbursed for the loss he incurred.

“I’m sure CCA is assessing its options, but this is about doing the honourable thing. They committed fraud, they breached their contract, damages were incurred by Mr Izmirlian. They had their day in court, and they lost. They should attempt to settle as we recommended and said.

“Before going to appeal we said over and over that it doesn’t look good. ‘I told you so’ would be something one attempts to say. I’m sure they [CCA[ have their options, and I’m sure Mr Izmirlian has his options if they seek to wriggle out of settling, but they should bring this entire unfortunate event to a close and let’s be done with this,” Mr D’Aguilar added.

“I’m looking at the fact Mr Izmirlian has suffered significant damages, and I’m happy he has persisted enough to pursue this matter and prevailed in the end. He’s been 100 percent vindicated and should receive his just rewards. For those people who doubted, and were disrespectful to him, they all have been proven wrong.”

The three CCA affiliates have previously admitted they have insufficient assets and income to satisfy Mr Izmirlian’s damages award, which has risen from an initial $1.642bn to now $1.7bn because 9 percent interest on the original $845m principal is accruing daily.

Between the trio, their most valuable assets have been identified as CCA’s two downtown Nassau resorts, the British Colonial and Margaritaville Beach Resort, which are said to have been appraised at a combined value of up to $355m. 

Genguo Ju, CCA (Bahamas) executive vice-president, asserted in an affidavit that the shares giving it ownership of both resorts were valued at $146m in the company’s most recent audited financial statements. And an appraisal conducted in 2024 had priced the combined real estate worth of the two properties at between $232.7m and $355.1m.

CCA (Bahamas), which owns the companies that hold the British Colonial and Margaritaville Beach resorts, plus CSCEC (Bahamas) are both the subject of winding-up petitions initiated by Mr Izmirlian before the Bahamian Supreme Court. He is seeking to have the KPMG accounting firm appointed as receiver over the two companies and hotels on the basis they are insolvent and cannot pay his damages.

However, Fred Mitchell, the PLP chairman, and others linked to the Government have hinted that any move by Mr Izmirlian to take over the two resorts in partial satisfaction of his damages award could be denied the necessary permits and approvals. Mr D’Aguilar, though, yesterday urged the Davis administration to side with Baha Mar’s original developer in the wake of the appeals court’s ruling

“I’m sure politicians do what they think is in their best interests,” he told Tribune Business, “but I don’t think it’s advisable to continue to support a strategy that was based on fraud, deception and breach of contract. I think Mr Izmirlian has done the right thing, he’s sought his day in court, and prevailed in both the lower courts and on appeal.

“That’s an indication it would be in our best interests as a country that the Government stand on the side of the person who is right, not the person who was wrong... I think Mr Izmirlian is an honourable man, and he would expect those who breached the contract with him to treat him honourably and deal with him honourably.”

Mr Mitchell has also suggested that Baha Mar’s former provisional liquidators, including accountant Ed Rahming, would be entitled to claim a portion of Mr Izmirlian’s damages award if CCA ever pays out to cover the hundreds of millions of dollars in liabilities left behind in the wake of the project’s collapse. These were ultimately paid by CCA and the China Export-Import Bank, and whether this can happen is not proven.

The New York appeals court ruling comes at an especially sensitive time for CCA and Chinese interests in general given that Donald Trump yesterday confirmed tariffs of 104 percent on all Beijing’s imports to the US as part of the global trade war and fight for supremacy between the two world powers.

Meanwhile, Michael Pintard, the Opposition’s leader, yesterday in the wake of the appeal court’s ruling renewed his call for an “immediate investigation” into CCA’s payment of $2.3m to a firm run by the son of Perry Christie’s top adviser when the Baha Mar dispute was at its peak.

Sir Baltron Bethel, though, denied any impropriety when Tribune Business first exclusively revealed on November 8, 2022, that CCA had paid this sum to Notarc Management Group, where his son, Leslie Bethel, was chief executive.

The payments were made between December 2014 and January 2016, when the dispute between Mr Izmirlian and CCA was at its peak, but both Sir Baltron and his son denied they influenced the former’s stance towards the dispute and its participants, or his advice to the Government and its actions.

Sir Baltron, who was the Government’s ‘point person’ in dealing with the Baha Mar controversy, said he had acted “with complete integrity and objectivity” on the Government’s behalf and there was no connection or interaction between himself and Notarc “at that time”. Leslie Bethel, meanwhile, asserted that claims of anything untoward over the $2.3m payments were “political mischief”, and they were “unrelated” to Baha Mar.

Apart from this, Mr Pintard said he and the Opposition are “somewhat encouraged” that all sides - including Mr Izmirlian - have pledged to protect and preserve Bahamian jobs and the British Colonial and Margaritaville resorts whatever the outcome of the dispute.

“It is our belief that all sides must have, as their number one priority, protecting the reputation of our country and employment of our citizens,” he added.