NASSAU, BAHAMAS- The Appellate Division of the New York Supreme Court has denied China Construction America’s (CCA) motion to stay the enforcement of a $1.6 billion judgment awarded to Sarkis Izmirlian, the original developer of Baha Mar, and vacated the interim stay granted in November.
This ruling clears the way for the immediate enforcement of the judgment, which holds CCA liable for fraud and breaches of contract that led to the 2015 bankruptcy of the Baha Mar resort.
China Construction America (CCA) obtained an “emergency stay” to prevent the potential liquidation of two Nassau resorts and to delay enforcement of the judgment.
That ruling, awarded to Baha Mar’s original investor Sarkis Izmirlian, found that CCA committed fraudulent actions that ultimately forced BML out of the Baha Mar project. CCA argued that the stay is essential to avoid insolvency, which it claims would impact operations at two hotels it owns—British Colonial and Margaritaville—that employ hundreds of Bahamians and support ongoing construction projects.
Justice Andrew Borrok had found that CCA, the US arm of China State Construction Engineering Corporation, defrauded BML and breached its investment agreement, leading to BML’s $845 million investment loss. The court ruled that CCA’s actions caused Baha Mar’s bankruptcy in June 2015, citing four instances of fraud and six contractual breaches by CCA, resulting in a $1.6 billion damages award.
The judgment also noted that CCA’s $54 million purchase of the British Colonial resort, rather than paying Baha Mar subcontractors, triggered a liquidity crisis. Additionally, the court found CCA’s $2.3 million payment to Notarc Management Group, run by Leslie Bethel (son of Sir Baltron Bethel), was intended to “curry favor” with the Bahamian government.
A spokesman for the defendants said in a statement: “This ruling has no bearing on the merits of our case and will not deter us from seeking to have the trial court’s error-ridden decision overturned on appeal. As we intend to show, the lower court failed to apply well-established principles of New York law and disregarded clear evidence that BML Properties grossly mismanaged the Baha Mar project and then drove it into a wrongful, secret bankruptcy to eliminate its obligations to other stakeholders, including the government and people of The Bahamas.”
