Baha Mar: Bahamas court delay of recognition hearing hurts U.S. case

By Caroline Salls

Pittsburgh, July 2 – Baha Mar Ltd. said the Supreme Court of the Commonwealth of The Bahamas adjourned the hearing on the company’s motion for recognition of its Chapter 11 bankruptcy proceedings to July 7 at the request of the office of the attorney general of the Bahamas and project lender The Export-Import Bank of China.

According to a news release, Baha Mar is “extremely concerned and disappointed” that the hearing was adjourned.

“This adjournment unfortunately makes it impossible at this time to act on the U.S. court approvals we received yesterday which would allow us, among other things, to pay salaries and benefits for Baha Mar citizens as well as pay ordinary course suppliers and vendors for goods and services post the commencement of the Chapter 11 process,” the company said in the release.

“The adjournment has very troubling implications for both the Chapter 11 process and our efforts to position Baha Mar to complete construction and open successfully.”

Baha Mar said the Bahamian Supreme Court directed it, at the request of the attorney general, to provide information necessary for the government to pay the salaries of the more than 2,200 Baha Mar employees for the period ended July 3.

The company said it is complying with this direction, although “the government’s unorthodox request for the direction appeared redundant in light of the U.S. court yesterday granting Baha Mar its DIP financing and approving Baha Mar’s motion to operate and fund its payroll in the normal course.”

“The government’s objection is quite alarming,” the company said in the release. “As we have made clear all week, time is of the essence for Baha Mar. Having Baha Mar succeed is extremely important to the long-term economic well-being of the country.”

“Extensive efforts to reach a compromise with our lender and our contractor have been fruitless and if we are frustrated in taking advantage in The Bahamas of the U.S. Chapter 11 process for very much longer, drastic and regrettable steps, including substantial staff reductions, will have to be taken.”

Baha Mar is a Nassau, Bahamas-based resort that filed for bankruptcy on June 29 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 15-11402.

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