Claiming that Baha Mar "induced" it to enter into an agreement on the premise that it held the title to the Cable Beach property when it in fact did not, the mega resort's luxury brand Rosewood has filed a motion in a Delaware court seeking to sever ties with Baha Mar. In its motion, Rosewood Hotel and Resorts International said Baha Mar has "incurred numerous defaults under the various Rosewood hotel agreements, many of which are incurable", including Baha Mar's failure to pay key hotel staff and its inability to secure funding. It categorized Baha Mar's "failure to own the land" as a violation of "a core precept of the Rosewood hotel agreements".

The Rosewood hotel includes approximately 99 guest rooms and suites and up to 92 residential units to be sold to purchasers. Rosewood contended that Baha Mar "can not sell what it does not own". In the U.S. court document filed on Wednesday, Rosewood also said its brand is "being tarnished" daily due to controversy surrounding Baha Mar. Rosewood said it is also losing money daily and as a result "is now suffering, and will suffer additional irreparable harm if it is not permitted to terminate the Rosewood Hotel Agreements and be relieved of its association with Baha Mar". As it relates to the land, Rosewood said when it entered into the agreements with Baha Mar, it was made to believe that Baha Mar owned the land.

"In addition, as a material inducement for Rosewood to enter into the Rosewood Hotel Agreements, Baha Mar represented and warranted to Rosewood that Baha Mar owns the land," the court document said. "...However, Baha Mar has told Rosewood that it does not in fact own the land, and, a preliminary search performed on August 14, 2015, of The Bahamas Registry of Records reflected that Baha Mar did not own any real property when it entered into the Rosewood Hotel Agreements and still does not. "Therefore, Baha Mar has incurably defaulted under the License Agreement and the Hotel Management Agreement." Explaining its arrangement with Baha Mar, Rosewood said it was to license the 'Rosewood Marks' to Baha Mar and Baha Mar was to compensate Rosewood through, among other things, the sale by Baha Mar of the residences at the hotel. "Additionally, Rosewood is to manage the residences and Baha Mar is to compensate Rosewood for such management," the motion said. Rosewood added, "Baha Mar cannot perform its core obligation to compensate Rosewood under the License Agreement and the Hotel Management Agreement without having title to the land." Also listed among its reasons behind its request to terminate the agreement with Baha Mar, Rosewood pointed to Baha Mar's financial state.

"Baha Mar has extremely limited access to funding to perform its obligations under the Rosewood Hotel Agreements and in fact is not timely performing its obligations to Rosewood under the Rosewood Hotel Agreements," the motion said. Rosewood said Baha Mar has also failed to pay both the rank and file employees and the senior executives at the hotel, whom Rosewood requires to run the resort, and has failed to reimburse Rosewood for pre-petition and post-petition fees and expenses due under the Rosewood Hotel Agreements. Additionally, Rosewood said Baha Mar's filing its Chapter 11 case is a default under the license agreement. Baha Mar filed for Chapter 11 bankruptcy on June 29. Since then all construction has ceased. Rosewood also highlighted Baha Mar's mounting public relations difficulties and its impact on the luxury brand.

"Given the controversy of the Baha Mar project, its failure to open and honor reservations from the public, the litigation and public acrimony between Baha Mar on the one hand, and all of its protagonists -- the Government of The Bahamas, [its contractor and lender] -- on the other hand, the existence of the DIP Financing Defaults, and the numerous incurable defaults under the Rosewood Hotel Agreements, Rosewood believes that its brand is being diminished and tarnished each day as a result of its ongoing association with Baha Mar," the motion said."

Moreover, as set forth above, each day Rosewood continues to incur costs and expenses for which it is not being compensated. "Additionally, Rosewood is prohibited under the License Agreement from exploiting the Rosewood Marks elsewhere in The Bahamas during the term of the License Agreement. "Similar radius restrictions on Rosewood's ability to manage hotels in The Bahamas exist under the Hotel Management Agreement while that agreement is in effect. "Suffering such restrictions while Baha Mar is hopelessly in default under the Rosewood Hotel Agreements further diminishes the value of the Rosewood brand and otherwise prejudices Rosewood because, at the same time Rosewood is not profiting from its relationship with Baha Mar as a result of Baha Mar's failure to perform and other incurable defaults, Rosewood is prohibited from exploiting the Rosewood Marks elsewhere in The Bahamas."

Rosewood is the first brand to seek to terminate its agreement with the development. The other brands involved in the resort aside from the central Baha Mar Casino & Hotel include the Grand Hyatt and SLS Lux.

Click here to read more at The Nassau Guardian