The government has determined that it would be "inappropriate" to proceed with provisional liquidators from PricewaterhouseCoopers (PwC) after PwC notified the government it had a potential conflict of interest given its previous involvement with China State Construction Engineering Corporation (CSCEC).

The government's legal counsel made the revelation in the Supreme Court as Justice Ian Winder heard its application to wind up Baha Mar and bring it under control of Bahamian courts. The government listed Prince Rahming, Gowon Bowe and Garth Galow of PwC as prospective liquidators.

Attorney Peter Knox, who heads the government's legal team in the winding up petition, said PwC indicated in a letter on Thursday that it had previously acted for CSCEC, representing a potential conflict of interest. Knox said this was news to the government as there was no previous indication of a conflict or potential conflict of interest. He told the court that the government has engaged three prospective provisional liquidators from Ernst & Young Chartered Accountants: Michele Thompson, Karen Hutchison and Roy Bailey.

According to Knox, CSCEC previously expressed "reservations" about PwC acting as provisional liquidators. However, he said the company indicated yesterday that it would not object to PwC assisting the government in the winding up proceedings. The government moved to wind up the troubled resort in recent weeks after Baha Mar filed for Chapter 11 bankruptcy protection in the U.S. district of Delaware at the end of June.

The government has said the move was with a view to complete the stalled project on Cable Beach. Maurice Glinton, legal counsel for Baha Mar, said that in affidavits, Bowe, Galow and Rahming stated that they carried out conflict checks. He expressed surprise that the court was now hearing of a potential conflict, calling it an "embarrassment".

The government requested an August 10 adjournment as a result of the change in provisional liquidators. Knox acknowledged that negotiations among Baha Mar and its stakeholders were ongoing and said the government "anticipates an agreement will be reached very soon". He said if an agreement is reached among the parties, the winding up petition would be unnecessary.

Glinton argued for a three-week adjournment to allow for the proper enquiries to be made on the new provisional liquidators. He said the additional time will aid in ensuring no further embarrassment to the court. Winder adjourned the winding up hearing to August 19. Baha Mar's application for leave to appeal Winder's refusal to recognize U.S. orders for creditor protection in The Bahamas last Wednesday will be heard on August 4. Outside of court, Knox declined to speak to the media. Glinton told reporters the entire winding up process has been "lacking in good faith, and that indeed it has been abusive".

"Now we know by the position with Gowon Bowe now having to withdraw, along with his other partner, that, in fact, they (conflicts) always existed," he said. "They should have known, but this is all part of what it is we have to meet, and have had to meet. "This whole process has been lacking in good faith, and that indeed it has been abusive of this.

"There are a lot of interests, which are at stake, and my clients investment in this country and concern for making sure that we get that place going and people get back to work, is one which is at the forefront of his (Izmirlian) concerns."

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