The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar’s original developer yesterday slammed what he branded a “conspiracy” involving the former Christie administration to oust him while defending his decision to seek Chapter 11 bankruptcy protection.

Sarkis Izmirlian and his BML Properties vehicle, in legal filings with the New York State Supreme Court’s appeals division, argued that the Chapter 11 process was “an appropriate vehicle to save the project” and their $850m investment even though it was defeated by opposition from the Government, China Construction America (CCA) and the project’s financier.

Hitting back at CCA’s own appeal filings, as the Chinese state-owned contractor seeks to overturn the $1.642bn damages awarded to himself by the New York State Supreme Court’s trial division, Mr Izmirlian said his offer to ‘match any price’ offered by other purchasers and re-acquire the multi-billion Cable Beach mega resort project was ignored by China Export-Import Bank, the financier and its agents.

“Chapter 11 was an appropriate vehicle to save the project,” he argued in yesterday’s legal filings. “CCA ‘preferred’ a liquidation and ‘new strategic investors’ giving ‘priority to Chinese companies’. CCA therefore conspired with the Bahamian Government and China Export-Import Bank to ‘push BML Properties and Baha Mar out of the project’.

“CCA and China Export-Import Bank moved for dismissal of the Chapter 11 in favour of a Bahamian liquidation. The bankruptcy judge opined that Chapter 11 ‘would be an ideal vehicle’, but ‘CCA, China Export-Import Bank and the Government of the Bahamas’ were unwilling to sit at ‘the bargaining table’.”

Mr Izmirlian also repeated the New York State Supreme Court’s verdict that CCA ‘actively worked to curry favour with the Bahamian Government and behind the back of Baha Mar’ by paying a total $2.4m to Notarc Management Group, a company headed by Leslie Bethel, son of then-prime minister Perry Christie’s senior policy adviser, Sir Baltron Bethel.

The payments were made during the height of the Baha Mar dispute, with Sir Baltron working as a key adviser trying to resolve the battle, but both he and his son have vehemently denied any wrongdoing in relation to the CCA payments. 

Nevertheless, Mr Izmirlian and BML Properties alleged yesterday: “CCA secretly paid millions to Notarc, affiliated with Bahamian official Sir Baltron Bethel, to ‘gain access to’ the Government, and then ‘co-ordinated ... the four-way negotiations between BML Properties, [CCA], the Bahamian government, and China Export-Import Bank’ regarding the project after March 2015.

“BML Properties offered to ‘match the price’ of any other offer to buy the project’s assets out of liquidation, but received no response. CCA made a ‘back room deal to replace’ BML Properties. The project was sold out of liquidation to a subsidiary of China Export-Import Bank, and then bought by another Chinese entity.

“BML Properties lost its entire investment, while CCA remained construction manager and received a windfall of $700m to complete the project.” CCA, too, blasted the allegations in its earlier New York filings, asserting: “The trial court’s suggestion that CCA Bahamas’ engagement with a private consulting firm, Notarc Management, was an effort to ‘curry favour with the Bahamian Government’ was entirely unfounded.

“There were no payments to anyone in the Bahamian government. Notarc was a private firm that CCA Bahamas engaged to help establish the CCA Panama office and develop business there. Plaintiff never even attempted to argue that defendants unduly influenced the Bahamian Supreme Court, which presided over Baha Mar’s liquidation and which the Delaware bankruptcy court found to be ‘fair and impartial’.”