Nassau, Bahamas — Bahamas Supreme Court Justice Ian Winder will rule on September 4 whether to approve the government’s request to appoint a provisional liquidator to manage the affairs of bankrupt megaresort Baha Mar.
Winder heard submissions on Friday from James Corbett QC, who appeared on behalf of Baha Mar.
Corbett challenged the government’s argument for appointing a provisional liquidator.
He said the government has suggested that it is seeking only to appoint a provisional liquidator to reach a compromise or agreement with Baha Mar’s contractor and lender, but not necessarily to wind up Baha Mar.
“After all, the application is called a winding up,” he said.
“We should be cautious in proceeding and conservative in any powers granted to provisional liquidators if approved.”
Corbett said there has been no plan presented by the government on how the appointment of a provisional liquidator will complete the project.
He said the liquidators would have to start cold, as they have not been involved in the Baha Mar issue, and would have to find $600 million to get the project completed.
He said in that regard it is not within a wing and a prayer of meeting that objective.
But Peter Knox, QC, who appeared on behalf of the government, said every day that passes places Baha Mar’s creditors and the interest of the public at risk.
He said the potential of a Bahamas credit downgrade by credit rating agency Standard and Poor’s looms.
“The respondents are indisputably insolvent,” Knox told the court. “Not maybe or probably; they are definitely insolvent and have been for two months or so.”
Knox added that in an affidavit filed by Sir Baltron Bethel, senior policy advisor to the prime minister, it is quite clear that both China Construction America (CCA) and the Export Import Bank of China want Baha Mar completed.
“They do not oppose the appointment of a provisional liquidator in The Bahamas,” he said.
“If provisional liquidators are appointed then the project can be completed. Then there is a chance of completion.”
The government had originally proposed to have liquidators appointed from PricewaterhouseCoopers (PWC), but that fell through when the company revealed that it had done work for Baha Mar’s contractor, China Construction America (CCA) Bahamas.
The government then proposed to appoint liquidators from Ernst and Young.
Baha Mar filed for Chapter 11 bankruptcy in the US District of Delaware on June 29 as a means to finish the project.
Friday was the third day of submissions.