Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comBahama Resort, Baha Mar Ltd., Chapter 11 Bankruptcy Filing Dismissed
Author: Joel R. Glucksman|October 22, 2015
Baha Mar’s bankruptcy case dismissed
Bahama Resort, Baha Mar Ltd., Chapter 11 Bankruptcy Filing Dismissed
Baha Mar’s bankruptcy case dismissed
On Sept. 15, Baha Mar Ltd., the owner and developer of the $3.5 billion Baha Mar resort in the Bahamas, had its Chapter 11 bankruptcy protection case thrown out by the U.S. Bankruptcy Court. According to the Wall Street Journal, the court dismissed the case because the judge “perceived no greater good” from it continuing in a U.S. court.
In the court’s decision, the judge asserted that the Chapter 11 bankruptcy filing for Baha Mar Ltd. fell outside U.S. jurisdiction, according to a Travel Weekly report. The reason was that the case involved the economic interests of the Bahamas; therefore, the court felt that the decision should take place there.
The judge’s decision to dismiss the case was based on the opinion of the Bahamian Supreme Court which stated that the project’s stakeholders felt the Chapter 11 bankruptcy case should be in the Bahamas. Further, the judge felt that a consensual decision needed to be reached between Baha Mar Ltd. and its primary creditors China Construction America and the Export-Import Bank. Had there been a mutual decision to seek bankruptcy protection, the judge stated that the case would have continued and a final resolution would have been reached in the U.S.
The decision was supported by China Construction America and the Export-Import Bank of China as well as by Baha Mar’s lesser ranking creditors because they had requested a dismissal. The group argued that the case needed to be decided by a court with jurisdiction over the Bahamian government, and the U.S. Bankruptcy court does not. Therefore, the group’s request was to have the case thrown out to clear the way for bankruptcy proceedings in the Bahamian Supreme Court.
After Baha Mar Ltd. filed for Chapter 11 bankruptcy protection in the U.S., the Bahamian government opposed the filing. The government argued that the case needed to be decided and resolved under Bahamian law, not in the U.S. Further, the Bahamian government stated that it would not recognize or uphold any decision made outside of the Bahamas. Then, according to a Reuters report, after months of negotiations, the government sought to have Baha Mar Ltd. removed from the Baha Mar project after it filed a Chapter 7 bankruptcy case against it to compel the company to liquidate its remaining assets.
However, Baha Mar Ltd. argued that Chapter 11 bankruptcy protection was the best option for the company to refinance and continue development on the project.
The U.S. Bankruptcy Court judge did allow the Chapter 11 bankruptcy case for Northshore Mainland Services Inc., a subsidiary of Baha Mar, to continue. According to Travel Weekly, this subsidiary is located and incorporated in Florida because it oversees all Baha Mar Ltd.’s U.S. operations.
The judge asserted that the case should serve as a guide for the two parties to resolve the bankruptcy dispute. While there are no indications of how the case will go, the judge did state that Northshore Mainland’s Chapter 11 bankruptcy case will proceed throughout the bankruptcy proceedings in Bahamian Supreme Court.
Following the decision, Baha Mar Ltd. officials explained in a statement that the company will seek alternatives to resolving the debt load on the project. One of those alternatives was a restructuring proposal submitted to the Bahamian Supreme Court that called for the removal of CCA Bahamas. Baha Mar’s major creditor and general contractor, from the project. This move would wipe out the $72 million debt load owed to CCA Bahamas for work on the project. The court is set to make a ruling on the new proposal in November.
In a separate decision, the Bahamian Supreme Court appointed a trustee to oversee the Baha Mar project. This trustee was given the authority to develop an alternative to Chapter 11 bankruptcy protection. The court also asserted that there will be a “wind down” date established where the Bahamian government will take control of the project to oversee its completion.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
Bahama Resort, Baha Mar Ltd., Chapter 11 Bankruptcy Filing Dismissed
Author: Joel R. Glucksman
On Sept. 15, Baha Mar Ltd., the owner and developer of the $3.5 billion Baha Mar resort in the Bahamas, had its Chapter 11 bankruptcy protection case thrown out by the U.S. Bankruptcy Court. According to the Wall Street Journal, the court dismissed the case because the judge “perceived no greater good” from it continuing in a U.S. court.
In the court’s decision, the judge asserted that the Chapter 11 bankruptcy filing for Baha Mar Ltd. fell outside U.S. jurisdiction, according to a Travel Weekly report. The reason was that the case involved the economic interests of the Bahamas; therefore, the court felt that the decision should take place there.
The judge’s decision to dismiss the case was based on the opinion of the Bahamian Supreme Court which stated that the project’s stakeholders felt the Chapter 11 bankruptcy case should be in the Bahamas. Further, the judge felt that a consensual decision needed to be reached between Baha Mar Ltd. and its primary creditors China Construction America and the Export-Import Bank. Had there been a mutual decision to seek bankruptcy protection, the judge stated that the case would have continued and a final resolution would have been reached in the U.S.
The decision was supported by China Construction America and the Export-Import Bank of China as well as by Baha Mar’s lesser ranking creditors because they had requested a dismissal. The group argued that the case needed to be decided by a court with jurisdiction over the Bahamian government, and the U.S. Bankruptcy court does not. Therefore, the group’s request was to have the case thrown out to clear the way for bankruptcy proceedings in the Bahamian Supreme Court.
After Baha Mar Ltd. filed for Chapter 11 bankruptcy protection in the U.S., the Bahamian government opposed the filing. The government argued that the case needed to be decided and resolved under Bahamian law, not in the U.S. Further, the Bahamian government stated that it would not recognize or uphold any decision made outside of the Bahamas. Then, according to a Reuters report, after months of negotiations, the government sought to have Baha Mar Ltd. removed from the Baha Mar project after it filed a Chapter 7 bankruptcy case against it to compel the company to liquidate its remaining assets.
However, Baha Mar Ltd. argued that Chapter 11 bankruptcy protection was the best option for the company to refinance and continue development on the project.
The U.S. Bankruptcy Court judge did allow the Chapter 11 bankruptcy case for Northshore Mainland Services Inc., a subsidiary of Baha Mar, to continue. According to Travel Weekly, this subsidiary is located and incorporated in Florida because it oversees all Baha Mar Ltd.’s U.S. operations.
The judge asserted that the case should serve as a guide for the two parties to resolve the bankruptcy dispute. While there are no indications of how the case will go, the judge did state that Northshore Mainland’s Chapter 11 bankruptcy case will proceed throughout the bankruptcy proceedings in Bahamian Supreme Court.
Following the decision, Baha Mar Ltd. officials explained in a statement that the company will seek alternatives to resolving the debt load on the project. One of those alternatives was a restructuring proposal submitted to the Bahamian Supreme Court that called for the removal of CCA Bahamas. Baha Mar’s major creditor and general contractor, from the project. This move would wipe out the $72 million debt load owed to CCA Bahamas for work on the project. The court is set to make a ruling on the new proposal in November.
In a separate decision, the Bahamian Supreme Court appointed a trustee to oversee the Baha Mar project. This trustee was given the authority to develop an alternative to Chapter 11 bankruptcy protection. The court also asserted that there will be a “wind down” date established where the Bahamian government will take control of the project to oversee its completion.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
