The legal battle that has erupted between Brookfield Asset Management and other Kerzner International creditors puts the true ownership of the Atlantis Resort and One&Only Ocean Club in question, said Democratic National Alliance (DNA) Leader Branville McCartney. McCartney said while the government remains quiet on the matter, the latest development in Kerzner's debt crisis puts thousands of direct and indirect jobs at risk.
"The prime minister went to Parliament rather prematurely to say those jobs are secure," said McCartney, referring to statements Prime Minister Hubert Ingraham made in the House of Assembly last November. As he briefed Parliament on the ownership transfer between Kerzner and Brookfield last year, Ingraham said he had been assured that the nearly 8,000 jobs on Paradise Island were safe. "I hope and pray those jobs are secure," said the Bamboo Town MP in an interview with The Nassau Guardian yesterday. "I have no doubt that persons are worried, especially the workers, but of course there are a number of other businesses that depend on Atlantis.
It would be ideal if no jobs are lost, but the reality is we can't say that for certain." The DNA leader said the assurance from the prime minister appears to be an election ploy, meant to ease voters' fears before they head to the polls later this year. "There is an election coming and based on those conditions, Brookfield [placed on Kerzner in its proposed management contract] it is reasonable to anticipate job losses after the election. So the new government will be saddled with that." In November, Kerzner International Chairman Sir Sol Kerzner announced that Brookfield was taking over Atlantis, One&Only Ocean Club and Kerzner's Mexican holdings in a $175 million debt-for-equity swap.
The Nassau Guardian previously reported that Kerzner was given a four-year management contract by Brookfield, which can be terminated at any time, with a penalty. But the complaint filed by other lenders indicates that up to the first week of January, that management contract was not yet finalized. Kerzner would also have to meet a gross earnings target of $215 million in the first year of the agreement, which the company last achieved in 2008. Brookfield is one of several creditors that financed Kerzner's $2.5 billion mortgage, a loan the company defaulted on. Last week, The Nassau Guardian revealed that Brookfield, a Canadian investment conglomerate, had been sued by other creditors who financed Kerzner's $2.5 billion loan.
The group claimed Brookfield negotiated a "sweetheart deal" that would primarily benefit the Canadian group and Kerzner. Trilogy Portfolio Company, Canyon Value Realization Fund, Canyon Value Realization Master Fund and the Canyon Balanced Master Fund are listed as complainants in the court documents. The group is seeking injunctive and declaratory relief to maintain the status quo by preventing the defendants from finalizing the ownership swap.
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