By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar’s original developer is blasting its contractor’s assertion that it was an “exact coincidence” the $54m sought to “accelerate” the resort’s completion matched what it needed to buy the British Colonial.

Sarkis Izmirlian and his BML Properties vehicle, in their latest post-trial exchange with China Construction America (CCA), attacked testimony given by Tiger Wu, the latter’s executive vice-president, that it was merely coincidental the sum it demanded in November 2014 to pay sub-contractors working on Baha Mar almost exactly matched the purchase price it paid a month later for the downtown Nassau resort.

“Wu was paid to testify and evasive. He claimed his negotiation of $54m, while needing $54m for the Hilton [British Colonial], was an ‘exact coincidence’ and that a proposal, nine days before opening, to completely shut down the project was ‘in the best interests of Baha Mar’,” Mr Izmirlian and his attorneys alleged in a September 19, 2024, filing.

The $54m payment, which was agreed to in a November 2014 meeting in Beijing in a bid to haul Baha Mar’s construction back on track, resolve all disputes between the parties and achieve a March 27, 2015, completion date was requested by CCA to cover “disputed change orders” and pay for sub-contractors and labour that were allegedly owed money for work on the resort complex.

However, Paul Pocalyko, a forensic accountant who appeared as a trial witness for Mr Izmirlian before the New York State Supreme Court, testified that his tracing analysis showed “CCA used Baha Mar’s money to purchase the Hilton property. There is a direct correlation between the amounts, the time frames and the bank records”.

These showed that the full $57m purchase price, which included $3m for a deposit to be held in escrow, was transferred via a series of transactions to CCA affiliates and the Chinese state-owned contractor’s Bahamian attorney, McKinney, Bancroft & Hughes, all on the same day - December 23, 2014. Not surprisingly, CCA rejected any link between the British Colonial and Baha Mar deals.

“First, CCA Bahamas never represented that it would use the $54m to pay sub-contractors after the Beijing meeting,” the Chinese contractor alleged in its court filings. “Under the minutes, the payment was a ‘settlement for unresolved financial disputes’. The minutes make no reference to how the payment could be used.

“The only ‘statement’ plaintiff cites is defendants’ discovery response, which is not a basis for a fraud claim and which plaintiff misrepresents. The response states that $39m of the $54m was a ‘reimbursement of sums previously advanced’ to sub-contractors. Plaintiff’s expert did not refute that fact because he cited only bank records post-dating the minutes, which would not reflect the sub-contractor payments.”

Rejecting any link to the British Colonial purchase, CCA then added that its acquisition did not breach the Baha Mar investors’ agreement it held with Mr Izmirlian. “The $54m was not ‘Baha Mar’s money’,” the contractor asserted.

“It was a partial settlement of $98m that Baha Mar owed CCA Bahamas as reimbursement for sub-contractor payments CCA Bahamas had already made and costs related to Bahamas hundreds of CCDs (construction change directives).

“CCA Bahamas did not need that payment to buy the Hilton. And plaintiff presented no evidence that construction resources were diverted to the Hilton, that the acquisition caused the Hilton - a pre-existing hotel - to compete with Baha Mar, or that the Hilton acquisition harmed the project at all.”

The Chinese state-owned contractor also again refuted Mr Izmirlian’s accusation that it sought to “influence” the Christie administration’s stance over the Baha Mar dispute by paying $2.4m to a company headed by Leslie Bethel, son of Sir Baltron Bethel, then-prime minister Perry Christie’s senior policy adviser and point person dealing with the issue.

“Nor is there any evidence that CCA Bahamas influenced the Bahamian government merely because CCA Bahamas lawfully hired and compensated Notarc, a consulting firm that had as one of its partners the son of a government official, to advise CCA Bahamas in Panama under contractual obligations,” CCA argued.

“Indeed, Mr Izmirlian himself admitted the Bahamian government needed no outside influence to oppose plaintiff’s efforts to have the project’s fate decided by a US court.” Tribune Business revealed in 2022 how CCA had paid $2.4m to Notarc Management Group when the Baha Mar controversy was at its peak.

Both Sir Baltron and his son denied to this newspaper that CCA’s payments to Notarc Management Group influenced the former’s stance towards the dispute and its participants, or his advice to the Government and its actions, after Mr Izmirlian filed for a Chapter 11 bankruptcy protection in summer 2015.

Sir Baltron said he had acted “with complete integrity and objectivity” on the Government’s behalf in helping to resolve the Baha Mar controversy, and there was no connection or interaction between himself and Notarc “at that time”. Leslie Bethel, meanwhile, asserted that claims of anything untoward over the $2.4m payments were “political mischief”, and that they were “unrelated” to anything to do with Baha Mar.

CCA and its attorneys, too, denied that the $2.4m payments represented “a bribe or conspiracy” to influence the then-government. John Burlingame, the US lawyer for CCA Bahamas and its affiliates, repeatedly told the New York State Supreme Court during a May 2023 hearing there was “no evidence” to back the “very, very serious” allegations.

Mr Izmirlian, summing up his position, told Judge Andrew Borrok: “CCA’s brief reads like its counsel attended a different trial. It presents arguments based on documents not addressed by any witness or even in evidence; mischaracterisations; and incredible testimony contradicted by the record.

“CCA makes Izmirlian the centerpiece of its causation and damages defences, but failed to ask him about those issues. No CCA witness testified about CCA’s counterclaims or purported corporate separateness. CCA attempts to salvage its veil-piercing defence with an untimely affidavit about Bahamian law, but it long ago waived that argument.... The court should enter judgment for BML Properties on all claims.”

Bur CCA countered: “CCA Bahamas made extraordinary efforts to achieve the March 27 opening, including adding over 1,000 workers and continuing work even when Baha Mar failed to make undisputed payments. And plaintiff knew the project’s status every step of the way.

“It knew how many workers were on-site and how many were returning to China, it knew what scheduling tools CCA Bahamas was using, and it knew the Government approvals were at risk because of Baha Mar’s designer’s flawed smoke-management design.

“That the project got to 97 percent completion by March 27 is not a breach of the investors’ agreement, much less a fraud. And CCA Bahamas was not even a party to the investors’ agreement, which did not concern construction.”