The government is proposing the appointment of three new joint provisional liquidators from two firms to manage the affairs of the embattled Baha Mar resort. If approved by the court, Edmund Rahming of KRyS Global, Mark Nicholas Cropper and Alastair Beveridge of AlixPartners Services UK would oversee Baha Mar with a view to getting the project completed and operational. The identities of the new proposed liquidators are contained in the seven winding up petitions filed by the attorney general on August 7 against seven of the Baha Mar companies.
The petitions were filed against Baha Mar Ltd., Baha Mar Land Holdings Ltd., Cable Beach Resorts Ltd., Baha Mar Enterprises Ltd., Baha Mar Properties Ltd., BMP Golf Ltd. and BMP Three Ltd. The government had filed one petition against Baha Mar in July. According to its website, KRyS Global is an international fraud investigation and dispute resolution firm. AlixPartners is a global business advisory firm that "focuses on solving our clients' most challenging business issues" including restructuring, according to its website.
The government had originally proposed the appointment of three professionals from the accounting firm PricewaterhouseCoopers (PwC). However, that fell through when the firm revealed that it had done work for Baha Mar's contractor, China Construction America (CCA). The government then proposed to appoint liquidators from Ernst and Young. During the winding up hearing in the Supreme Court last week, an attorney appearing on behalf of Ernst and Young denied allegations the company is in a conflict of interest in relation to Baha Mar.
The allegation was contained in court documents and was read in court. It says that Ernst and Young did legal work for Baha Mar and is listed as a creditor of the company. But attorney Megan Taylor dismissed the claim. "There is no conflict," Taylor said. "The allegation that Ernst and Young provided advice to Baha Mar is erroneous."
According to the winding up petition, Baha Mar owes the government over $58 million. Baha Mar filed for Chapter 11 bankruptcy in the U.S. District of Delaware on June 29. U.K. attorney Peter Knox, who appeared on behalf of the government during the winding up hearing, argued that it would be just and equitable to wind Baha Mar up because it is insolvent and has no plan to open the resort in the forseeable future.
Knox said the government is not seeking to "wind up Baha Mar today", but to have provisional liquidators appointed who may be able to reach a compromise with Baha Mar's contractor and complete the resort. But U.K. attorney James Corbett, who appeared on behalf of Baha Mar, argued that the court should dismiss the government's petition. He said the argument that the appointment of joint provisional liquidators will solve Baha Mar's problems is misguided and compared it to someone sprinkling "fairy dust" on a situation and hoping for the best. Supreme Court Justice Ian Winder will announce his decision on September 4 on the request to appoint a provisional liquidator.
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