The developer of the Bahamas’ troubled $3.5bn resort appeared to get a reprieve on Friday (31 July) when a Supreme Court judge adjourned a hearing on its liquidation after an eleventh-hour intervention.
The Bahamian government wanted a liquidator to take over the affairs of developer Baha Mar Ltd, the bankrupt company behind the Baha Mar megacasino and holiday resort.
The developer meanwhile has filed for Chapter 11 bankruptcy protection in a US court, which would allow it to survive as a commercial entity.
Baha Mar Ltd is locked in a multi-faceted legal dispute with the Chinese contractor building the nearly-complete resort, China Construction America (CCA), owned by state-owned contractor, China State Construction Engineering Corporation (CSCEC).
A hearing on the government’s winding up petition, to which Baha Mar Ltd strongly objected, was due to be held on Friday. The government had appointed as provisional liquidators three people from PriceWaterhouseCoopers (PwC) Bahamas.
But, in a surprise turn of events during the night before the hearing, a possible conflict of interest was raised when PwC Bahamas said it had previously acted for CSCEC, local media reported.
As a result, Justice Ian Winder, a judge in the Bahamian Supreme Court in Nassau, adjourned proceedings on the winding-up petition to 19 August.
Baha Mar Ltd used the adjournment to repeat its objections to the government’s course of action.
"The government’s entire application is misguided and without merit, and the whole process is abusive, oppressive and undertaken in bad faith," it said in a statement on the same day.
"We look forward to demonstrating those facts to the court. Moreover, it should be clear to the entire country that the government’s action do not serve the best interests of the Bahamas and its people. Those interests are best served by the completion and opening of the resort, a process that the winding-up petition will only undermine and delay."
The government of the Bahamas responded to Baha Mar Ltd’s claims on 31 July. This described the statement as "entirely misleading".
It said the government had "sought to create a fair playing field for the development" by encouraging all parties to seek an out-of-court agreement and by joining talks in Nassau and in Beijing.
It said progress was being made on an out-of-court settlement and it hoped that the delay in the court action would allow that to happen.
It added that to protect its national interest, it had taken steps to ensure that "if the fate of the Baha Mar project has to be determined through court proceedings, those proceedings occur in the Bahamas, not in the US", and that any liquidator must be "entirely free of conflicts of interest".
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It will take great care and supreme wisdom to arrive at a just ” out of court” settlement i.e. via a highly competent and experienced mediator who can somehow find a multifaceted way whereby all the parties may loose in the short term but be compensated by at least sufficient medium to long term future gains! No outright winners or losers can achieve any kind of a just settlement!