Bahamian Government backs decision over liquidation of the Baha Mar Casino after former Prime Minister levels criticism

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The Baha Mar Casino and Hotel was the biggest integrated casino resort to be developed in Nassau, Bahamas at an estimated $3.5 billion. The casino resort was initially scheduled to open in 2014 and generate thousands of employment opportunities for the locals, boost the overall economy and generating nearly ten percent of the government’s budget.

There were a number of issues that delayed the opening of the mega casino resort construction stage and in the end its main developer Sarkis Izmirlian did not have sufficient funds to complete the project and filed for chapter 11 bankruptcy in a Delaware court. The Baha Mar casino resort was around 97 percent completed and the government initially tried to get new developers to complete the project and finally deciding that it might end up investing its owns funds to complete this vital casino project.

However in the end, Prime Minister Perry Christie’s government decided to liquidate the project as they believed this was the best move to protect the economy of the Bahamas and its people. The decision received a lot of criticism from a number of fronts and most recently from the former Prime Minister Hubert Ingraham.

The former PM lashed out at the Christie administration and stated that when the government found that Sarkis Izmirlian’s main financial backer, the Export-Import Bank of China (CEXIM) was no longer willing to extend its credit facility, the government would have made a better decision if it decided to borrow $100 million from taxpayer funds and finance the project. Ingraham stated that the government should have allowed the chapter 11 bankruptcy in Delaware to proceed instead of petitioning the Supreme Court and to place it under provisional liquidation. He also alleged that the government took a decision in the end that favored the Chinese interests that were associated with the Baha Mar casino resort.

The government responded to these allegations by releasing a statement which said “By commencing winding-up proceedings and moving for appointment of provisional liquidators, the government preserved the possibility of a negotiated resolution, while assuring that the fate of the Baha Mar resort and the claims of its creditors would be determined in The Bahamas – not in a bankruptcy court in Delaware. This measure, among other things, saved Bahamian unsecured creditors the cost of pursuing their claims in the US.”

The former PM stated that the government should have followed a similar strategy used in the early 1990s regarding the sale of the former Resorts International Paradise Island property when Resorts International applied for chapter 11 bankruptcy.

The government also addressed these allegations by stating that the Paradise Island property involved a completely different scenario since Resorts International was a major company with properties in different locations, including Atlantic City whereas the Baha Maha developer’s biggest project was in the Bahamas. The government stated that Resorts International bankruptcy filing threatened only the Paradise Island project in the Bahamas whereas the Baha Mar casino resort project threatened the economy in the Bahamas and thousands of employment opportunities and hence the government made the best decision to protect the interests of its people.

 

Bahamian Government backs decision over liquidation of the Baha Mar Casino after former Prime Minister levels criticism was last modified: July 31st, 2016 by Renee Kingsley


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