The Battle for the $3.5 billion Baha Mar is getting hotter.
It’s been a little more than three weeks since Baha Mar Ltd filed for Chapter 11 bankruptcy protection in the United States, and the dispute over the Caribbean’s largest resort project continues between a group that includes the Baha Mar, China State Construction Engineering Corp, lender Export-Import Bank of China and the Bahamian government.
The biggest recent development was a decision last week by the government of the Bahamas to file a winding up petition in Bahamian court against the 14 Bahamian-incorporated companies that make up Baha Mar.
That move, which came after days of talks in Beijing, could pave the way for a court-appointed provisional liquidator to supervise the completion and opening of Baha Mar, which was first scheduled to open back in December 2014 but has been subject to a series of delays.
It led to an allegation by Baha Mar that the winding-up proceedings amounted to a seizure of private property.
“We urge the Government of The Bahamas not to seize private party assets and to allow the private parties in what is after all a commercial enterprise to come to an agreement that would allow for the completion and opening of Baha Mar as soon as possible, as the Government has publically and explicitly urged,” the Baha Mar said last week. “The Bahamian Government’s decision to seek a winding up of Baha Mar is both unnecessary and reactionary, puts Baha Mar’s staff and assets at severe risk, and significantly jeopardizes the future of the resort.”
That led to a strong rebuke from Bahamas Prime Minister Perry Christie, who said “the nationalization of private property is not only unconstitutional, it is completely repugnant to my personal political philosophy and ethos of governance and that of my government.”
On Monday, the US affiliate of Baha Mar contractor China State Construction Engineering Corp, China Construction America, filed a motion to dismiss Baha Mar’s bankruptcy claim in Delaware Federal Court, on the grounds that the action belonged in the Bahamas.
That is in line with the argument of the Bahamian government.
For Baha Mar, keeping the action in Delaware is crucial: at the beginning of the month, US Bankruptcy Judge Kevin Carey approved a bid to access $30 million in interim financing to pay for operational costs on the project.
Indeed, Baha Mar said Tuesday it was opposing the motion to dismiss, citing a desire to achieve “consensual resolution of the issues.”
The Baha Mar project, which first broke ground in 2011, is the largest of its kind in the history of the Caribbean.
The project’s developers filed the Chapter 11 bankruptcy after the company alleged that the contractor had “repeatedly” missed construction deadlines, which lead to the delays of both the planned late December 2014 opening and the planned March 27 opening.
“Unable to open, the resort has been left without a sufficient source of revenue to continue our existing business,” Baha Mar CEO Sarkis Izmirlian said at the time.
Upon completion, it is slated to consist of four hotels: the eponymous Baha Mar Hotel and Casino, the SLS Lux, the Grand Hyatt and a Rosewood hotel, all located on Nassau’s famous Cable Beach.
Another property, the existing Melia Nassau Beach, will become part of Baha Mar as well. That property, adjacent to the Baha Mar development, was called the Sheraton Nassau Beach before it was acquired by Baha Mar. It continues to operate.