CCA: Debtors do not have substantive U.S. connection

Wed, Jul 22nd 2015, 12:32 PM

Supplementary evidence filed yesterday by China Construction America (CCA) Bahamas Ltd. in its bid to dismiss Baha Mar's Chapter 11 bankruptcy cases in the U.S. bankruptcy court of Delaware calls into question the legitimacy of Baha Mar's claims that it operates businesses and incurred expenses in the state of Florida.

The supplement to Exhibit D in CCA's motion contains a suite of declarations signed and sealed by Secretary of State of Florida Ken Detzner on July 20 stating that the records of the Florida Department of State do not disclose corporations by the name of the following entities "foreign or domestic, active or dissolved": Baha Mar Sales Company Ltd., Baha Mar Support Services Ltd., BMP Golf Ltd., BMP Three Ltd., Cable Beach Resorts Ltd., Riviera Golf Ventures Ltd., and BML Properties Ltd.

The supplement added to the previous Florida Department of State certifications filed on Monday pertaining to Baha Mar Enterprises Ltd., Baha Mar Entertainment Ltd., Baha Mar Land Holdings Ltd., Baha Mar Leasing Company Ltd., Baha Mar Ltd., Baha Mar Operating Company Ltd., and Baha Mar Properties Ltd. Baha Mar's previous filings had indicated that the debtors had incurred "expenses for electricity, telephone, water, waste disposal, cable television, Internet, and other essential services... in the ordinary course of their businesses at Cable Beach, New Providence, The Bahamas and at offices located in Orlando and Miami, Florida."

According to a filing supporting the Baha Mar bankruptcy application in U.S. Bankruptcy Court in Delaware, Northshore Mainland Services Inc. (Northshore), the entity under which Baha Mar's developers collectively filed for U.S. bankruptcy protection, leases and manages call centers in Florida and New Jersey. However, CCA's motion points out that the debtors listed only Bahamian utility providers. Furthermore, CCA charged that the only U.S. tax liability that the debtors alleged was a $100,000 sales and use tax owed to the Florida Department of Revenue.

"It is clear that none of the debtors have a connection with the United States such that the exercise of jurisdiction in the United States would be neither economic nor efficient. The debtors have failed to demonstrate that Northshore, despite being incorporated in Delaware, holds assets in or conducts substantive business in the United States: the company is licensed to do business in Florida but seems to have no office there, and it appears that it opened a New Jersey office for the sole purposes of this bankruptcy... Although these other debtors purport to have one collective office in Florida, none of them are authorized to do business in Florida," read the CCA motion.

CCA filed a motion to have Delaware's bankruptcy court dismiss with prejudice Northshore's application for Chapter 11 protection. The Bahamian Supreme Court is expected to make a decision today as to whether it will grant Baha Mar's application seeking authorization of those U.S. proceedings.

Click here to read more at The Nassau Guardian

 Sponsored Ads