Izmirlian family prevails in case finding that CCA fraudulently thwarted the Baha Mar project opening to serve its own interests
NASSAU, BAHAMAS – BML Properties Ltd. has been awarded over $1.6 billion against China Construction America in its long-running New York lawsuit concerning the Baha Mar project, prevailing on all claims.
The bench trial, overseen by New York Supreme Court Justice Andrew Borrok, examined whether BML’s $1.5 billion losses resulted from the resort developer’s overleveraged debt or construction delays.
BML had claimed that CCA, the Chinese state-owned construction firm responsible for building the luxury resort Baha Mar, concealed significant delays and intentionally sabotaged the project’s March 2015 opening date to drive BML into liquidation. According to BML, this sabotage led to the loss of its $745 million investment, now totaling $1.55 billion with interest.
Sarkis Izmirlian, the original developer of the mega-resort, filed a lawsuit six years ago, alleging “massive fraud” by CCA. Izmirlian claimed that CCA intentionally engaged in work slowdowns or stoppages, preventing the resort from opening to paying guests on March 27, 2015, and contributing to BML’s liquidity crisis. The development, ultimately placed into receivership, was later sold to its current owner, Hong Kong conglomerate Chow Tai Fook Enterprises.
Justice Borrok ruled that CCA, the U.S. business unit of China State Construction Engineering Corporation – China’s largest construction group, defrauded BML Properties as well as breached the parties’ investment agreement, directly resulting in the complete loss of BML’s $845 million investment in Baha Mar.
Sarkis Izmirlian, Chair and CEO of BML Properties and the original developer of Baha Mar, said: “I first conceived of Baha Mar more than 20 years ago, only to see it ripped out of my hands at the brink of opening by CCA” The evidence showed that rather than fulfilling its promise to have the resort ready for paying guests, CCA covertly used the money to buy the British Colonial Hilton in Nassau rather than paying subcontractors, secretly cut hundreds of workers during the critical run-up to the Project’s grand opening, diverted resources and key personnel to Panama to start a new project rather than finish Baha Mar, intentionally slowed and stopped work on Baha Mar in attempts to extort exorbitant and illegitimate payments, and ultimately conspired with corrupt Bahamian government officials to oust BMLP, with catastrophic effects on Baha Mar.
The decision called CCA’s “empty, fraudulent” promise to achieve a March 27, 2015 opening date “phony” and “an absolute sham and shakedown of Mr. Izmirlian” who “at all times…acted commercially reasonably, honorably, and in the best interest of the Project.” Further, the court found that CCA’s actions caused “a liquidity crisis pushing BMLP out of its $845 million investment” and thus Baha Mar’s “Chapter 11 bankruptcy in June of 2015 was a foreseeable and natural consequence of the Defendants’ actions.”
“We are grateful to have finally had our day in the US judicial system and thank Justice Borrok for his fair and thoughtful approach to the case,” said Izmirlian, “and we intend to proceed with the enforcement of the judgment in an equally thoughtful and prudent manner.”
Loading ...
