By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A former Bahamian Contractors Association (BCA) president yesterday expressed fears that the industry will suffer “very poor results” in collecting the multi-million dollar sum owed to it by Baha Mar’s contractor.

Stephen Wrinkle, telling Tribune Business that he was basing this prediction on China Construction America’s (CCA) past performance, urged its Bahamian sub-contractors to band together and seek legal recourse if dissatisfied with the compensation offered.

Mr Wrinkle was speaking out after the website created to handle the settlement of Baha Mar creditor claims warned that the process did not apply to CCA’s Bahamian sub-contractors and vendors.

They will instead have to negotiate directly with the Chinese state-owned contractor for sums that it owes them, a development that Mr Wrinkle described as “not very encouraging”.

And, in a development that may infuriate and amuse Bahamians (especially Baha Mar’s creditors) in equal measure, the entity created to handle the claims process is called Perfect Luck Claims Ltd.

While the name sounds more like that of a web shop operator, the bottom of the claims form requires all creditors to assign the rights to their claim to this entity once they accept their payout.

“Any claim approved will require the applicant to assign their claim to Perfect Luck Claims Ltd in order to get paid,” all Baha Mar creditors were told.

Why Baha Mar creditor claims rights have to be transferred to this entity, in return for compensation payouts, is unclear. However, Tribune Business received several calls yesterday from irate Bahamians, asking whether the ‘Perfect Luck Claims Ltd’ name was a joke or intended as further provocation.

“Un-flipping real. That’s just a slap in the face. Unbelievable,” said one former Baha Mar staff member, who should be able to recover 100 per cent of the severance pay and other benefits owed to them.

Mr Wrinkle, meanwhile, questioned why CCA sub-contractor/vendor claims were being handled by a different process, and the method by which they will be dealt with.

“Given that CCA are maintaining they’ve not been paid themselves, it’s going to be extremely difficult to collect,” the ex-BCA president said of Bahamian contractors.

“There are so many impediments to that. I anticipate very poor results. The processing of valid claims by CCA has historically been a problem for small and medium-sized contractors throughout the project.”

Mr Wrinkle said CCA had frequently “procrastinated, made partial payments” or delayed paying Bahamian sub-contractors for as long as possible, while warning them that they would receive nothing if they left the Baha Mar site.

“The attitude was that if sub-contractors quit, they wouldn’t get anything,” he told Tribune Business. “That was the problem throughout the contract if you leave the site.”

Prime Minister Perry Christie, in unveiling the agreement with the China Export-Import Bank, Baha Mar’s secured creditor, for the project’s construction completion, said CCA had to compensate its sub-contractors and vendors as part of the deal.

“China Construction will finish the works, and will resolve outstanding claims with its suppliers and sub-contractors,” Mr Christie said that night.

“Going forward, many of the same people and companies who were previously contracted will be re-engaged to complete the project.”

Typically, few details were provided, and there was nothing from the Prime Minister to indicate that there will effectively be two claims recovery processes - one for Bahamian creditors of the Baha Mar group of companies, and another for CCA’s sub-contractors and vendors.

The Government’s view is that because CCA (Bahamas) and its parent are solvent, with their own assets, they will be able to satisfy creditor claims from their own financial resources. And creditors will also have legal recourse if they are dissatisfied with the settlement on offer.

But this also raises more unanswered questions, including how CCA - which has every incentive to ‘beat them down’ - will deal with creditor claims, and how much Bahamian companies can reasonably expect to recover.

While some Bahamian sub-contractors may enjoy a little leverage if they are required to complete Baha Mar’s construction, CCA will likely seek to negotiate their return at a discount - reduced compensation now in return for future payment tomorrow.

It is also unclear how the five-person Baha Mar creditors committee, upon which CCA has a seat, will deal with the construction company’s claim. Documents related to the project’s Chapter 11 bankruptcy filing showed that CCA claimed to be owed $140 million, although the list of unsecured creditors said this sum was closer to $72.6 million.

Describing the claims processes as “a dog and pony show” and “all smoke and mirrors”, Mr Wrinkle warned his fellow Bahamian contractors that they may have to seek legal redress against CCA (Bahamas) in the Supreme Court.

“I was suggesting to the contractors that they form a Coalition and sue CCA for non-payment a long time ago,” he told Tribune Business, “while having the claims registered in the Bahamian court system.

“Since the Government is so keen to have everything settled here, have a process through the court system. As of now, we have nothing.

“If we’re going to negotiate with CCA, we’re going to have a long, hard road. The odds of them [Bahamian contractors] collecting have diminished substantially. There’s absolutely no incentive for CCA to settle with those people other than those they need. I’m afraid the Bahamian contractors will have to take it to court. Oh my God, what a mess.”