NASSAU, Bahamas, July 21, 2016 /PRNewswire/ -- In an effort to protect the interests of hundreds of unsecured creditors, Granite Ventures Ltd ("Granite"), an unsecured creditor of Baha Mar, has filed a summons with the Supreme Court of The Bahamas as a step toward moving the provisional liquidation of the Baha Mar Ltd to a full liquidation. The provisional liquidation has been inappropriately prolonged and has failed to provide either any standing or transparency for Baha Mar's unsecured creditors. For more than a year, the best interests of this sizable group have not been served by the Bahamian government's ill-conceived placement of Baha Mar into provisional liquidation under which unsecured creditors, including many Bahamians, have received no information about any progress towards resolving their debts, while the movement from provisional liquidation to liquidation is continuously postponed without reason.
Granite said, "It is abundantly clear that the provisional liquidation process has failed to serve the best interests of unsecured creditors but only protected the economic interests of the Export-Import Bank of China ("CEXIM") and, by association, China State Construction Engineering Corporation ("CSCEC") and its subsidiary CCA, the general contractor who failed to meet its own deadlines to complete Baha Mar and forced Baha Mar into a bankruptcy filing in June 2015. Since that time, The Government of The Bahamas, acting in concert with these Chinese entities as it courts economic benefits from China, first pushed Baha Mar into the provisional liquidation process and subsequently has resisted alternative approaches that would have placed Baha Mar on sound financial footing. The result is that all parties who have had an economic interest in Baha Mar have been subject to the all-too-secret agenda of CEXIM and CSCEC, the only parties to seemingly have protection under Baha Mar's provisional liquidation.
"Precious time has been wasted and the asset of Baha Mar can only have dissipated, a captive of the provisional liquidation and the machinations of CEXIM. By moving Baha Mar to full liquidation status, Granite seeks to ensure that unsecured creditors will finally have a fully court-appointed independent party, namely a liquidator, who will be able to secure fairness through their statutory powers by acting as a check on the bank appointed Receivers. In the inordinately long provisional liquidation—a time period well beyond what provisional liquidations are meant to cover—unsecured creditors, including hundreds of Bahamian companies, remain unpaid and with no visibility into either the likelihood or the timing of any repayment of debts owed.
"The provisional liquidation of Baha Mar involved the joint provisional liquidators named by the Government. Yet time and again, these joint provisional liquidators have demonstrated a complete ineffectiveness and indifference to the interests of unsecured creditors. They have failed to investigate potentially valuable assets in the estate of Baha Mar, including legal claims against CCA, CSCEC (Bahamas), CSCEC and CEXIM. Conversely, and disturbingly, the CEXIM appointed receiver-managers have professed their lack of interest in Baha Mar's unsecured creditors, having laid out in plain terms that they "owe no duties to unsecured creditors and therefore they cannot be obligated to answer for the manner in which they seek to manage the property."
"The joint provisional liquidators have been given little authority and no funding, resigning them to figurehead positions rather than enabling the best resolution of the current situation. Under the Granite filing, we are proposing the appointment of permanent liquidators, who would have a seat at the table to ensure that the value of the Baha Mar assets is maximized. It is critical that such professionals be in place. The government has made clear that it cannot insert itself meaningfully into any sales process. There needs to be more interests served than those of just CEXIM and CSCEC in any sales transaction or disposition of Baha Mar assets given the sizeable obligations owed to unsecured creditors. Liquidation, as proposed by the Granite motion, is the proper next action to resolve the Baha Mar situation fairly and properly."
The next date for the hearing for the provisional liquidation of Baha Mar is listed for September 30th, 2016, at which this petition should be heard. The hearing to consider Baha Mar's full liquidation was originally scheduled for November 2, 2015.
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SOURCE Granite Ventures Ltd