By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Sarkis Izmirlian’s bid to block a fresh appeal of his $1.7bn damages award by China Construction America (CCA) has been rejected by a US court despite assertions it has just a 4 percent chance of proceeding.

Baha Mar’s original developer, in a May 2, 2025, legal filing argued that the Chinese state-owned contractor’s prospects of being granted permission to appeal by the New York Court of Appeal were “even lower” than the typical 4 percent ratio because the case raises no legal issues of “novel” or public importance.

However, Christine Gravelle, the New Jersey bankruptcy court judge, disagreed and, on Monday, May 5, gave CCA Construction, the contractor’s US unit, the go-ahead to join its Bahamian affiliates, CCA (Bahamas) and CSCEC (Bahamas), to pursue their second bid to overturn Mr Izmirlian’s $1.7bn fraud and breach of contract damages award made against the three of them jointly.

Mr Izmirlian, in a move that would have blocked one of the three CCA entities from pursuing the appeal had it succeeded, argued against lifting the “automatic stay” imposed by CCA Construction’s Chapter 11 bankruptcy protection proceedings to allow it to participate. He accused the contractor of “abusing the bankruptcy process” and using it as a “litigation tactic to stall” efforts to collect his $1.7bn damages award.

“The court should deny CCA’s second request to modify the automatic stay both because it has not demonstrated even a remote possibility of succeeding in its attempt to further appeal BML Properties’ judgment, and because CCA is abusing the bankruptcy process through its dilatory tactics for the benefit of its non-debtor shareholder and non-debtor affiliates,” Mr Izmirlian and his BML Properties vehicle alleged.

Baha Mar’s original developer also argued that “pursuit of meritless further review” of judgments handed down by two separate New York courts would negatively impact CCA Construction’s “estate”, thus reducing potential recoveries for himself and other creditors. And he alleged that it would also “delay a much-needed robust, independent investigation” by the US bankruptcy trustee’s court-appointed examiner.

“Rather than trying to re-litigate BML Properties’ judgment, CCA should focus its efforts on maximising value by working with BML Properties and co-operating with - rather than trying to limit or resist - the examiner’s investigation into misconduct and claims for the benefit of its estate,” Mr Izmirlian argued.

“CCA commenced this Chapter 11 case as a litigation tactic in the wake of BML Properties’ $1.6bn judgment and after the New York Appellate Division denied its request for a stay of enforcement pending appeal... Less than four months later, the appellate division issued a unanimous decision categorically rejecting all of CCA’s arguments and upholding BML Properties judgment in full against all three defendants.”

“For all of CCA’s puffery, not one justice sided with CCA on any issue. And because the appellate division’s decision was unanimous, CCA has no further appeal as of right. Instead, it must make a rarely granted motion for leave for permission to pursue a discretionary appeal to the New York Court of Appeals.”

Mr Izmirlian and BML Properties added: “The probability that CCA’s leave application will be granted is clearly remote. In recent years, only about 4 percent of civil motions for leave to appeal to the New York Court of Appeal were granted. The chances of CCA’s motion being granted here are even lower because CCA’s proposed appeal does not raise issues of law that typically ‘merit review’ by the New York Court of Appeals....

“At this juncture, no true estate fiduciary would continue to dispute the merits of BML Properties’ underlying judgment, and there is no indication that the [CCA Chapter 11] special committee has conducted any assessment regarding the likelihood of success of the appeal. Against CCA’s unlikely success on appeal, BML Properties will be prejudiced if the motion is granted.

“CCA and its affiliates have used this bankruptcy as a litigation tactic to stall BML Properties’ efforts to satisfy its judgment after the appellate division denied the motion for a stay of enforcement pending appeal,” they continued.

“What’s more, this case is predominantly a two-party dispute, as evidenced by the timing and stated reasons of the bankruptcy filing, the lack of interest by general unsecured creditors in this case to enable the United States Trustee to form a creditors’ committee, and the fact that no non-insider creditors, other than BML Properties, have appeared at hearings in this case.

“CCA and its affiliates have vigorously opposed BML Properties’ efforts to investigate the circumstances that led to this bankruptcy, including by CCA resisting discovery in advance of the second day hearing and opposing the appointment of a statutorily required examiner.

“While BML Properties agreed in good faith to pause those efforts while CCA pursued its appeal as of right, CCA should not be allowed to stall any longer. CCA has not proceeded in good faith, and it should not continue its abuse of the bankruptcy process.”

The New Jersey bankruptcy court, though, was not impressed. And CCA Construction, in its own response to Mr Izmirlian, hit back at the original Baha Mar developer’s claims of financial mismanagement that included booking $96m in debt owed to subsidiaries and affiliates “under a line item for country club membership”.

Mr Izmirlian doubled down on these claims, repeating them in his latest legal filings, but the Chinese state-owned contractor accused him of making “categorically false” claims and an “abuse of this Chapter 11 case” by deliberately “misconstruing” facts. He had also asserted that “at least one high-ranking CCA executive potentially used corporate funds to make tens of thousands in personal purchases”.

“On April 17, 2025, BML Properties provided CCA with a copy of the document production BML Properties previously received from American Express in response to BML Properties’ subpoena to American Express,” CCA Construction asserted.

“The production contains records relating to personal charges made using a credit card belonging to a former CCA executive, including statements of charges to the credit card and records of monthly card payments made by that individual from a personal bank account - not from any of CCA’s corporate bank accounts.

“BML Properties  incorrectly suggested that this executive ‘potentially’ used corporate funds to make payments on the credit card account to cover personal purchases. The suggestion that the executive used corporate funds to make personal purchases is categorically false,” it continued

“If BML Properties had taken the time to compare the account number in the credit card statement with the bank account numbers listed.... BML Properties would have readily ascertained that none of those bank accounts were used to make the payments at issue.

“Further, if BML Properties had reached out to counsel for CCA.. and simply asked about the ‘potential’ personal use of the credit card – rather than making an unsubstantiated suggestion of misconduct in a public filing – counsel for CCA immediately would have confirmed to BML Properties that the credit card was used for personal charges, and the account from which the credit card payments were made was the executive’s personal bank account, not a CCA account.”