The government is proposing that three professionals from PricewaterhouseCoopers be appointed provisional liquidators for Baha Mar. If approved by the court, Prince Rahming, Gowon Bowe and Garth Calow would oversee the affairs of the troubled resort project. The revelation is made in an affidavit of Director of Legal Affairs Antoinette Bonamy.

The affidavit was made in support of the government’s decision to file a winding up petition against Baha Mar.

As well as having operations in The Bahamas, PricewaterhouseCoopers is a global firm with extensive experience in dealing with complex restructuring assignments of this nature, the affidavit says.

The provisional liquidators have confirmed that they are willing and able to accept the proposed appointment, it adds.

Bonamy said in the affidavit, “In all the circumstances, I respectfully submit on behalf of the government that the respondents (the Baha Mar group) should be wound up, both on the basis that they are insolvent and unable to pay their debts as they fall due and/or on the basis that in all of the circumstances of the case it is just and equitable that they should be.”

She added that the urgent need to get the project — which is understood to be approximately 90 to 98 percent complete — completed necessitates the need to appoint provisional liquidators to manage Baha Mar’s affairs in such a way that will facilitate a resolution with the project’s major stakeholders and creditors.

Bonamy said in the affidavit that none of the orders sought by the government would be inconsistent with Baha Mar’s stated objective of restructuring and ultimately completing the project as expeditiously as possible. “Indeed, I submit that the orders sought would in fact optimize the prospects of achieving those objectives in an expeditious, convenient and appropriate manner,” she said.

The attorney general filed the winding up petition last Thursday as a countermove to Baha Mar’s filing of Chapter 11 bankruptcy protection in the U.S. district of Delaware on June 29.

In a statement on Monday night, the government said it was still observing talks between Baha Mar and its contractor, China Construction America (CCA).

The government said if those talks progress and financing is agreed to complete Baha Mar, it would be an active participant in all-party talks “leading to an agreement that defines the terms of the construction and financing for the resumption, completion and opening of Baha Mar”.

Preserve and maintain

Bonamy’s affidavit says that on Friday, July 10, 2015, Baha Mar filed an application in Delaware Bankruptcy Court seeking U.S. court approval of a “preserve and maintain alternative”.

The application was supported by a sworn declaration made by Baha Mar President Tom Dunlap.

In that declaration, Baha Mar explains that unless negotiations achieve immediate “meaningful progress” then Baha Mar proposes to “immediately downsize their operations to a minimum over approximately 40 to 60 days, which includes archiving a substantial portion of their current property and reducing their workforce to a skeletal staff to minimally maintain the resort assets until such time as construction can be completed and the property opened”.

Bonamy stated, “In other words, the respondents (Baha Mar) have stated categorically that they intend to suspend the project indefinitely, unless the negotiations are successful (i.e. acceptable to them).

“The purpose of the ‘preserve and maintain alternative’ was therefore to seek U.S. court approval for the payment of incentives of up to $4.6 million for 99 employees in order to facilitate that suspension.

“Whether or not this was intended as a pre-negotiation posturing by the respondents, the government’s position is clear; given the critical importance of the project to The Bahamas, it will not countenance indefinite delays of the kind proposed by the respondents.”

The parties proceeded to negotiations in Beijing last week after the Dunlap declaration was filed.

Prime Minister Perry Christie reported that those talks ended without agreement.

Baha Mar has insisted it is still negotiating with its Chinese partners.

Bonamy also noted in the affidavit that no agreement was reached last week.

She said, “In light of the Dunlap declaration and for the reasons set out in this affidavit, the government makes this winding up and appointment application.”

Bonamy noted that the government intended to argue that Baha Mar’s application to the Bahamas Supreme Court for recognition of its Chapter 11 filing was “fundamentally unsound”.

Minister of State for Legal Affairs Damian Gomez argued this point when the parties returned to court on Monday.

Justice Ian Winder is set to rule today on Baha Mar’s recognition application.

“The winding up and appointment application has been made in order to ensure that the project is completed and trading commenced with minimum delay and disruption,” Bonamy said in the affidavit.

“Based on information available to me, the three major stakeholders in this case, namely the government, the bank and the contractor, all agree that the project needs to be completed as quickly as possible and the resort opened for business as a matter of urgency.

“On the other hand, the respondents are actively seeking, via the Dunlap declaration, to implement a strategy whereby the project is suspended indefinitely, whilst [Baha Mar] seeks new financing.”

Justice Winder is set to hear the winding up matter on July 31.

In a national address on Thursday, Prime Minister Perry Christie said, “These compulsory or involuntary winding up proceedings are designed to work in very similar terms as a Chapter 11 but with the stark difference that they will be controlled by provisional liquidators under the supervision of the Bahamian courts rather than being controlled by [Baha Mar CEO Sarkis] Izmirlian.

“These liquidators, if appointed by the court, will be neutral and impartial professionals of the highest quality and of impeccable credentials.”