Baha Mar Developer Pushes for Nassau Hotels as Security in Fraud Case Appeal

This development marks another unexpected turn in a tense legal battle that could have significant implications for Nassau’s gaming and hospitality sectorsImage Source: Shutterstock.com

Sarkis Izmirlian, the original developer of the Baha Marresort in The Bahamas, has filed a new legal motion in the New York State Supreme Court, urging that two prominent Nassau hotels owned by China Construction America(CCA) be used as security for his $1.642 billiondamages judgment. 

This Move Extends a Fierce Legal Battle

October’s milestone judgment in favor ofBML Properties-led Sarkis Izmirlian awarded $1.6 billion in damages against CCA, a subsidiary of the state-owned China State Construction Engineering Corporation. The ruling found CCA guilty of fraud and misconductduring the development of the Baha Mar resort in The Bahamas.

CCA committed numerous acts of fraud, diversion, and misuse of assets, financial transfers, and commingling between unrelated entities, and repeatedly lied while doing it.

Sarkis Izmirlian

The dispute centers around the Baha Mar project, a sprawling 1,000-acre luxury resorton New Providence Island. The complex includes three hotels with 2,300rooms, 284 residences, a casino, a spa, aJack Nicklaus-designed golf course, more than 45 eateries, ten pools, high-end retail shops, and a water park.

Izmirlian, the project’s original developer, invested $845 millionthrough BML Properties to transform Baha Mar into a world-class resort. However, the 2015 scheduled opening was derailedby CCA’s alleged misconduct, which the court suspected was adeliberate effortto push BML Properties into bankruptcy.

Both Parties Refuse to Back Down

According to a recent report by local news outlet The Tribune, Izmirlian has suggested that CCA’s ownership of theBritish ColonialandMargaritaville Beach Resortin Nassau could serve aspartial collateralfor the damages awarded to his company, BML Properties. The appeal comes after CCA sought an injunctionto prevent Izmirlian from enforcing the massive judgment pending its appeal of the verdict.

CCA cites no case where a court has granted a stay under such circumstances without requiring any security, let alone a case involving a judgment of this size.

Sarkis Izmirlian

Izmirlian said CCA was making “speculative” claims about itsfinancial hardshipand potential harmto its Bahamian employees. CCA, for its part, has maintained that it cannot postthe $1.96bn bond typically required to secure a stay in such cases. The company described the judgment asfar surpassing the collective value of its assets, including the two Nassau hotels.

The New York State Supreme Court will now examine this matter. Izmirlian has asked that the court either deny CCA’s motion outright or grant a stayonly uponthe company posting security – which could include its Nassau hotels. Withbillions of dollarsand the future of two high-profile Bahamian resorts hanging in the balance, the case could have long-lasting implications for the region.