GGRAsia – Contractor aims to dismiss Baha Mar U.S. bankruptcy case

Contractor aims to dismiss Baha Mar U.S. bankruptcy case

Jul 22, 2015 Newsdesk Latest News, Top of the deck, World

CCA Bahamas Ltd, a unit of China State Construction Engineering Corp, on Monday filed a motion to dismiss a United States-filed bankruptcy case related to the Baha Mar casino resort (pictured in a rendering) in the Bahamas. The contractor said the Baha Mar case belongs in the courts of the Bahamas, not in the United States.

CCA Bahamas’ motion to dismiss said the resort – and 14 of 15 entities that filed in the U.S. for voluntary bankruptcy in relation to the project – are located in the Bahamas. The contractor said the U.S. filing improperly aims to allow Sarkis Izmirlian, the current owner of Baha Mar Ltd, to remain in charge.

Baha Mar Ltd, chaired by Mr Izmirlian, is developing the US$3.5-billion casino resort. Executives of Baha Mar Ltd travelled to China last week to meet representatives from China State Construction and officials from the project’s lender, Export-Import Bank of China.

The developer filed for Chapter 11 bankruptcy protection in a Delaware court on June 29, claiming it faced debts of US$2.7 billion.

In a statement on Tuesday, quoted by the Wall Street Journal, Baha Mar Ltd said it would oppose the motion to dismiss but added that it wants “to achieve a consensual resolution of the issues” and is in ongoing discussions with both the contractor and the lender.

The Export-Import Bank of China bankrolled most of the project with a US$2.45 billion loan, according to Reuters news agency.

A judge in the Bahamas is expected to rule on Wednesday on whether the country will recognise the U.S. filing made under Chapter 11 of the U.S. Bankruptcy Code, and thus allow Bahamas-based assets to be protected under U.S. bankruptcy laws.

If the judge doesn’t allow that, an insolvency proceeding filed by the government of the Bahamas last week would likely proceed. The government has said it wishes to put the management of Baha Mar under the jurisdiction of a government-appointed trustee.

In a speech last week, the Bahamas’ Prime Minister Perry Christie called completion of the Baha Mar a matter of national importance and said it could be salvaged and opened more quickly through a liquidation process in the Bahamas rather than via a U.S-based one.