By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A New York judge has signed off on requests for Bahamian judicial help over the British Colonial Hilton’s sale and other issues relating to Sarkis Izmirlian’s $2.25bn fight with Baha Mar’s contractor.

Judge Andrew Borrok, of the New York State Supreme Court, signed on November 4, 2021, five separate requests for assistance from the Bahamian judicial system in obtaining evidence sought by both Baha Mar’s original developer and China Construction America (CCA) and its affiliates.

The assistance requests, made on behalf of both CCA and Mr Izmirlian’s BML Properties vehicle, ask the Attorney General’s Office to apply to the Bahamian Supreme Court for orders compelling a local realtor; engineering company; accountant; Scotiabank (Bahamas); and Citibank (Bahamas) to provide documentary evidence that could bolster both sides’ legal claims.

Tribune Business revealed the requests for Bahamian judicial assistance when they were made earlier this year, but Judge Borrok’s sign-off means they have now gone live or been put into action. Both parties in the Baha Mar dispute had hoped to obtain the evidence they were seeking by August/September this year, but that is now an impossibility.

One assistance request involves Cross & Mosko Real Estate and Development Company, whose principals are Jimmy Mosko and Kevin Cross, asking that they produce multiple documents and communications relating to the British Colonial Hilton’s October 2014 sale to CCA which they brokered.

Mr Izmirlian and BML Properties believe these may provide evidence to support their claim that the Chinese state-owned contractor used a disputed $54m payment intended to “accelerate” its construction work at Baha Mar to instead fund its acquisition of the downtown Nassau resort.

“Plaintiff seeks to obtain documents from Cross & Mosko, who brokered the sale in October 2014 of the British Colonial Hilton to defendants,” the New York court’s legal assistance request states.

“These documents have a direct connection to the subject matter of the New York litigation because plaintiff alleges that in order to purchase and develop the British Colonial Hilton, defendants used funds they had pledged to the Baha Mar project and diverted both tangible and intangible resources to the Hilton venture, defrauding plaintiff and exacerbating the delays already plaguing Baha Mar.”

The legal assistance request, made under The Bahamas’ Evidence (Proceedings in other jurisdictions) Act 2000 and filed by the New York court on April 5, 2021, asks that Cross & Mosko be “compelled” to produce all documents related to the sale plus communications on the deal with CCA; Aubaine Capital (the seller); and the then-Christie administration.

Other documents sought include communications potentially detailing CCA and its affiliates moving “workers, managers or tangible resources” from Baha Mar to the British Colonial Hilton as the contractor ramped up to develop the $200m Pointe project and associated Margaritaville-branded resort.

Communications from CCA executives, including David Wang, Daniel Liu and Tiger Wu, relating to CCA’s “intention to work or actually work” at the Bay Street resort property are also targeted by the Cross & Mosko legal assistance request, which is targeted at a three-year period covering 2013-2015.

The New York court has also moved on behalf of Mr Izmirlian and his legal team to obtain the production of documents thought to be held by Graphite Engineering, whose principal is Sonia Brown, and which acted as the “engineer of record” for the Baha Mar project’s construction.

Setting out the original developer’s case, the court documents state: “Plaintiff contends that defendants - who invested in and served as construction manager of the Baha Mar project - concealed their intent and knowledge that they would not construct the complex on time and on budget, in violation of New York’s common-law prohibition on fraud and defendants’ contractual obligations.

“Much of the parties’ dispute hinges on whether and to what extent defendants’ work, including its alleged failure to timely obtain the requisite permits and approvals from the Government of the Bahamas, resulted in the delays to the project.

“Graphite was the engineer of record for the project and worked with the various design and construction teams, as well as the Government of The Bahamas, to keep the project compliant with local code requirements,” the New York court added.

“Graphite also oversaw the mechanical, electrical, plumbing and fire protection installation. Graphite is therefore likely to possess documents and evidence concerning defendants’ alleged failure to adequately address defects in the project.”

Among the documents and papers being sought are communications over “stop work orders” issued by the Ministry of Works in relation to construction activities at Baha Mar in the lead-up to Mr Izmirlian’s ultimately unsuccessful Chapter 11 bankruptcy protection filing in mid-2015.

Graphite Engineering’s dealings with CCA over efforts to get electrical power for the project; the fire alarm testing results; alleged “fireproofing defects” and “CCA’s failure to build the fire life-safety system in conformance with Government of The Bahamas regulations and approved plans” are also the focus of the legal assistance request.

There is no suggestion that any of the Bahamian companies involved, or their principals and executives, have done anything wrong in relation to either the British Colonial Hilton’s sale or the Baha Mar project.

However, the legal assistance requests are not limited to Mr Izmirlian. For the New York court is requesting assistance from the Attorney General’s Office and Bahamian Supreme Court on CCA’s behalf in a bid to obtain information on transactions and money flows involving multiple Baha Mar accounts at Citibank (Bahamas) and Scotiabank (Bahamas) when Mr Izmirlian was in charge.

CCA is seeking these details to bolster its counter-claim that Mr Izmirlian’s alleged mismanagement of the Baha Mar project wiped out its $150m preference share investment in the original development, even though it was subsequently selected for the $700m contract to complete the Cable Beach-based venture.

And the Chinese state-owned contractor is also seeking documents allegedly under the control of Ed Rahming, the Bahamian accountant and Intelisys (Bahamas) principal, who acted as one of the three Baha Mar liquidators after the Chapter 11 bid failed.

“Defendants seek documents relating to Baha Mar’s finances in order to evaluate the appropriateness of its expenditures throughout the project, along with e-mail communications and other electronically stored information regarding the project,” the legal documents seen by this newspaper state.

“Access to these documents is particularly important given that Baha Mar Properties (Mr Izmirlian’s vehicle) has indicated that the ‘scope of documents available’ to it in the normal course of discovery is ‘severely limited’ because the liquidators and/or receiver/managers, pursuant to lawful Bahamian court order, took possession of the ‘[Bahamar.com email domain, and computer servers, databases and physical documents ... in 2015’.”