The Baha Mar saga and Izmirlian’s triumph in New York Court explained

A landmark ruling in a New York State Supreme Court, awarded a whopping $1.6 billion to Sarkis Izmirlian, the original developer of the Baha Mar resort in the Bahamas after nearly seven years of wrangling with China Construction America’s (CCA), alleging fraud and breaches in a completion date that caused him to file Chapter 11 bankruptcy, losing control of the $3.5 billion resort.

Here’s what to know:

Who is Sarkis Izmirlian?

Sarkis Izmirlian is a businessman who was the original developer and driving force behind the Baha Mar resort, a project he envisioned over two decades ago. The resort was to revitalize Cable Beach on New Providence, the beachfront area of the island, becoming a direct competition to Atlantis Resort over Paradise Island.

Izmirlian is from a wealthy family and was a resident of Lyford Cay. His father was a Swiss-based Armenian peanut tycoon named Dikran Izmirlian. His company built a large interest in the Gambian peanut market.

Izmirlian’s family invested $845 million in equity into the Baha Mar development.

What Happened?

China Construction America’s affiliated companies–China State Construction Engineering Corporation Bahamas (CSCECB) was the main contractor, while the Export-Import Bank of China pumped billions of dollars in construction loans.

Workers from China were responsible for the construction of the mega-resort.

Troubles multiplied between Izmirlian’s BML Properties Limited and CCA concerning payments and workmanship–Izmirlian complained about faulty balcony railings and frail pipes which he claimed burst when workers tested the fire sprinklers.

The claims are that CCA delayed the money when he complained.

Given a guarantee that the resort would open on March 27, 2015, Izmirlian hired over 2000 hotel workers, but the opening was delayed. He accused CCA of giving false completion dates and mismanaging funds, which led to a series of delays and financial losses.

He then secretly filed for bankruptcy in the US on June 29, 2015, and the CCA accused him of disrupting the project. This resulted in the further souring of his relationship with the then-Christie administration.

The resort sat in limbo, chain-locked, under a blue tarp, as few room lights remained on at night, awaiting an official opening day.

The resort was later bought by Hong Kong-based Chow Tai Fook Enterprises.

On April 21, 2017, Prime Minister Perry Christie opened the resort but many of the retail outlets stayed closed. Deputy Prime Minister at the time, Philip Davis (the current PM), confirmed that many of the guests were not paying customers, but were invited for a “preview period”. But many Bahamians called it a “sham opening” just before the general election scheduled for May.

What’s the role of Former Prime Minister Perry Christie and the Progressive Liberal Party in the Baha Mar controversy?

The Progressive Liberal Party (PLP), led by then-Prime Minister Perry Christie, has faced scrutiny over its handling of the Baha Mar dispute. The New York State Supreme Court says its evidence suggests China Construction America (CCA) made payments to gain favor with the Bahamian government, which may have influenced the government’s support for CCA against Izmirlian’s interests.

Sir Baltron Bethel, Christie’s senior policy advisor and ‘point man’ in the handling of the Baha Mar saga, helped the Bahamas government oust Izmirlian from the Baha Mar project, the court said, adding that CCA made $2.3m in payments to Notarc Management Group, an entity owned by Sir Baltron’s son, Leslie Bethel, to “gain access” to his father.

What China Construction America says

China Construction America has called the court ruling “deeply flawed” and is appealing its decision.

“BML Properties overborrowed, overspent and overextended itself and then drove the project into wrongful, secret bankruptcy without first seeking the contractually required consent of minority investor CSCEC Bahamas to eliminate it’s obligations at the expense of other stakeholders.”