By Neil Hartnell

Tribune Business Editor

nhartnell@tribunemedia.net

Sarkis Izmirlian’s personal involvement helped secure the settlement of his decade-long legal battle with Baha Mar’s main contractor that was yesterday approved by a US judge.

Legal documents filed yesterday with the New Jersey bankruptcy court, and obtained by Tribune Business, disclose that Baha Mar’s original developer was involved in “consultations by telephone” during the two-day mediation that resulted in the deal over his $1.8bn damages award by the New York State Supreme Court

China Construction America (CCA), and its two Bahamian affiliates, CCA Bahamas and CSCEC Bahamas, in a statement confirmed that the US court had approved the “comprehensive agreement” with BML Properties, Mr Izmirlian’s corporate vehicle, to resolve the long-running Baha Mar dispute. 

“We are pleased that the court has approved this resolution, which enables us to focus exclusively on our strategy for delivering world class construction projects and hospitality operations to our customers worldwide,” said Yan Wei, CCA’s chairman and chief executive. “We are grateful for the steadfast support of our customers, team and partners as we move forward to embrace future opportunities.”

CCA reaffirmed that CCA Bahamas will, as a result of the settlement, retain ownership of downtown Nassau’s British Colonial and Margaritaville Beach Resort hotels free from the threat of Mr Izmirlian’s winding-up petition.

That action has been discontinued as part of the deal that will see both sides drop all claims and legal actions against the other. “In accordance with the agreement, BML Properties is dropping all claims in the US and The Bahamas against CCA, CCA Bahamas and CSCEC Bahamas and their respective affiliates without any admission of liability on their part,” the Chinese state-owned contractor added.

“CCA Bahamas retains its ownership interest in the British Colonial and Margaritaville Beach Resort hotels, which the company believes will benefit the entire Bahamian community well into the future.” CCA and its affiliates must now also pay an undisclosed settlement amount to Mr Izmirlian to settle the $1.6bn damages he won over his fraud and breach of contract claim against them - a ruling that was upheld by one New York appeals court.

With interest accruing at 9 percent, the damages are understood to have increased to around $1.8bn. CCA must pay Mr Izmirlian either “two business days after receipt of such funds or 30 days after approval of this settlement agreement by a final Order of the Bankruptcy Court” - whichever comes sooner. This suggests at least part of the payout is to come from other entities within the CCA network and its immediate China State Construction and Engineering Corporation (CSCEC) parent.

“The significant value that will be provided to CCA in the form of payment of the settlement amount by, or using funds from, CSCEC Holding and other affiliates, including the non-debtor co-defendants (CCA Bahamas and CSCEC Bahamas), is a reasonable and fair exchange for releasing these difficult-to-collect inter-company claims,” CCA said in legal documents last week.

“Put differently, obtaining access to sufficient value to fully resolve the Baha Mar litigation that has cast a shadow over CCA’s business is plainly in the best interests of the estate.”

Baha Mar’s original developer also appears to have held significant leverage for, apart from the Supreme Court winding-up petition threatening CCA’s two downtown Nassau resorts, the Chinese contractor’s legal filings make clear its US arm would have been unable to emerge from Chapter 11 bankruptcy protection without securing a deal with him.

The judgment awarded to Mr Izmirlian accounted for more than 99 percent of CCA’s debts, and yesterday’s legal filings confirm that both sides had agreed to “defer” until today the “submission of any evidence” in the Supreme Court winding-up cases to allow for the settlement agreement’s filing with the New Jersey court - which has now been done.

The legal filings also reveal that the parties reached a settlement within 48 hours of beginning the New Jersey court-ordered mediation last week. “The parties convened to mediate their disputes on November 20, 2025 at the offices of Debevoise & Plimpton LLP (a US law firm),” it was confirmed.

“Following the mediation, on November 21, 2025, all parties agreed to the principal terms and conditions of the settlement, and negotiated and executed the term sheet on November 23, 2025.”

The Chinese contractor hinted that its decision to settle had been sparked by uncertainties over whether its last-ditch appeal of Mr Izmirlian’s $1.642bn damages award will succeed, given that the New York Court of Appeals has yet to give it permission to mount a challenge let alone hear the substantive aspects of its case.

And the fall-out from the decade-long Baha Mar dispute has “cast a shadow” that has damaged CCA’s ability to secure new construction contracts, with the contractor arguing that further prolonging it “would maintain the cloud over CCA’s business, distract its management and ultimately undermine its business”.

“The settlement is also in the best interests of the debtor’s [CCA] estate,” the Chinese contractor argued. “The settlement will allow CCA to finally conclude the Baha Mar litigation and remove an overhang that has constrained the business operations of CCA and its operating subsidiaries for years.

“The Baha Mar litigation and related adverse judgment is the principal reason that this Chapter 11 case was filed and impacted CCA’s efforts to implement a restructuring. It also constrained the CCA group’s ability to obtain surety bonds which, in turn, limited its ability to secure new construction contracts.”

While CCA stood by its assertions that the New York verdict in favour or Mr Izmirlian was “incorrect as a matter of law”, and “feels confident it would have a strong case before the New York State Court of Appeals”, it admitted that the latter forum had yet to grant it permission to proceed with the appeal and may never do so.

“The settlement amount reflects the considered, informed business judgment of CCA and the special committee [for Chapter 11] with respect to these probabilities of success,” CCA added. “The settlement also avoids future highly complex litigation, both with BML Properties and others…

“In addition, were CCA’s motion for leave to appeal denied by the New York Court of Appeals and the Baha Mar judgment rendered effectively final and non-appealable, BML Properties has already indicated that it would seek to pursue payment from CCA’s affiliates, including CSCEC Holding, through veil-piercing and direct claims in connection with the Baha Mar litigation.

“If pursued, this litigation, even if it would not directly impact CCA’s estate, would maintain the cloud over CCA’s business, distract its management, and ultimately undermine its business. The settlement also avoids this costly and complex litigation for CCA.”