China Construction America (CCA) has maintained a resolute silence after Baha Mar filed for bankruptcy in the United States and subsequently sued CCA in the United Kingdom. Yesterday, however, CCA broke its silence on the matter in a manner of speaking; two law firms, Shearman & Sterling LLP and Young Conaway Stargatt & Taylor, LLP, appeared as counsel for CCA in the bankruptcy proceeding.
After entering their appearance, the lawyers demanded the usual copies of all notices and pleadings in these cases, and in addition, "any notice, application, complaint, demand, motion, petition, pleading or request, whether formal or informal, written or oral and whether transmitted or conveyed by mail, delivery, telephone, telegraph, telex or otherwise filed or given with regard to the above-referenced cases and the proceedings therein".
The lawyers for CCA stressed that neither the notice of appearance nor any subsequent appearance, pleading, claim or suit is intended or shall be deemed or construed as a consent by CCA to the jurisdiction of the Delaware court or any other court with respect to proceedings, if any, commenced in any case against or otherwise involving CCA.
The decision by CCA to have counsel involved also did not constitute a waiver of any right of CCA (i) to have final orders in non-core matters entered only after de novo review by a district judge; (ii) to trial by jury in any proceeding so triable herein or in any case, controversy or proceeding related hereto; (iii) to have the reference withdrawn by the United States District Court in any matter subject to mandatory or discretionary withdrawal; or (iv) to other rights, claims, actions, defenses, setoffs or recoupments to which CCA, is or may be entitled under agreements, in law, or in equity, all of which rights, claims, actions, defenses, setoffs, and recoupments are expressly reserved hereby.
Creditor number one
Meanwhile, the first creditor to lodge a claim against Baha Mar in U.S. Bankruptcy Court in Delaware is John's Dept. Store Ltd.; John's yesterday asserted a claim for $20,629.55.
The bankruptcy court has not yet set a deadline for filing proofs of claim against the debtors. The court is expected to eventually give creditors notice by mail of the deadline to file a proof of claim.
Also, Atlanta lawyers Darryl S. Laddin and Frank White of the firm of Arnall Golden Gregory LLP, entered an appearance as counsel for Bahamas Food Services, Ltd. ("BFS"), and requested not only notices and papers but, "without limitation, any other notice, application, complaint, demand, motion, petition, monthly operating report, pleading or request, whether formal or informal, written or oral, and whether transmitted or conveyed by mail, delivery, telephone, telegraph, telex or otherwise filed with regard to these cases and any proceedings therein".
The company has issued no statement, but Bahamas Food Services is among the list of thousands of creditors owed money by Baha Mar. It is not clear in the documents filed to date how much the company is owed.
Relief
And Judge Kevin Carey yesterday authorized Baha Mar - which has filed for chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Delaware - to pay or honor critical vendor claims that arose prior to June 29 2015, or which become due or payable after that date but before the final hearing. The judge left it to Baha Mar's "sole discretion" to pay, and capped the payments at $3.5 million.
The judge also authorized - again at Baha Mar's discretion - claims as an administrative expenses in the ordinary course of business, up to $350,000.
Judge Carey also granted a request by Baha Mar authorizing the continuation of customer programs, which the developer claims are necessary to the fair and responsible administration of the chapter 11 bankruptcy proceedings and essential to Baha Mar's ability to maximize the value of the estates.
Laura Davis Jones, who is representing Baha Mar for Pachulski, Stang, Ziehl and Jones in the Delaware bankruptcy court, called the programs an "integral component of their business", and said Baha Mar has or will implement a number of customer programs to preserve customer goodwill and effectively operate within their competitive industry.
Jones told the court Baha Mar relies heavily on these customer programs to drive repeat business, attract new customers, and generate revenue and earnings. Those programs include customer reinvestment programs, customer deposits and warranty programs.
Customer reinvestment programs - through which hotels engage in programs designed to enhance customer experience, reward continued patronage and drive new and repeat business - generally fall into two categories: Customer loyalty programs and customer offers.
The judge granted most - if not all - of the relief sought by Baha Mar.
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