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Baha Mar’s ability to reorganize its finances under U.S. law hangs in the balance as the developer of the $3.5 billion Caribbean resort heads to court Monday in the Bahamas and Delaware.
Baha Mar filed for bankruptcy in Wilmington last month after delays forced it to miss its March 27 opening date. Construction on the project is 97 percent complete, according to court papers.
Baha Mar also applied to the Bahamas Supreme Court for recognition of the U.S. proceeding. But the Bahamian government is seeking to have the matter handled locally, saying completion of the resort would otherwise face delays and uncertainty.
“Were the processes to continue in the U.S., the fate of this Bahamian project, its Bahamian employees and the international reputation of the sovereign nation of the Bahamas would be in jeopardy,” Prime Minister Perry Christie said in a statement July 16.
The prime minister said he wants a neutral party “to prepare a strategic and workable road map for the completion and opening of the resort” under supervision of a Bahamian court.
Baha Mar is fighting to keep the case in the U.S., calling the government’s decision “both unnecessary and reactionary.”
Such a move “puts Baha Mar’s staff and assets at severe risk, and significantly jeopardizes the future of the resort,” Baha Mar said in a July 17 statement.
The Bahamian court called off the first scheduled hearing on Baha Mar’s application at the request of the country’s attorney general and the Export-Import Bank of China, the project lender. The delay prevented Baha Mar from acting on U.S. bankruptcy court approvals granted to continue paying wages and vendors.
Baha Mar postponed a July 7 hearing on its application for recognition of the U.S. court’s orders until Monday to make time to negotiate a global resolution that would permit completion of the project.
Resort officials are in China in discussions with general contractor China Construction America Inc. and the lender, according to an e-mailed statement from the resort Friday.
The case is In re Northshore Mainland Services Inc., 15-11402, U.S. Bankruptcy Court District of Delaware (Wilmington).
This article was written by Dawn McCarty from Bloomberg and was legally licensed through the NewsCred publisher network.