By Neil Hartnell

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar’s contractor and Sarkis Izmirlian have been ordered to “make a good faith attempt” to resolve the latter’s bid to collect on his now-$1.8bn damages award via mediation that will also involve the entity that owns two Nassau hotels.

Christine Gravelle, chief judge at the New Jersey federal bankruptcy court, in a November 13, 2025, order called on Baha Mar’s original developer, China Construction America (CCA) and its Chinese parent to resolve “all or some of the issues” stemming from the former’s successful New York claim for fraud and breach of contract over his ousting from the multi-billion dollar Cable Beach resort development.

And her Order also confirmed that two Bahamas-domiciled entities, CCA (Bahamas) and CSCEC (Bahamas), the former of which is the immediate parent for downtown Nassau’s British Colonial and Margaritaville Beach Resort, will “participate” in the mediation even though neither is covered by, or involved in, CCA’s Chapter 11 bankruptcy protection process.

“It is ordered that the parties shall make a good faith attempt to settle all or some of the issues between the parties through mediation and will attend, personally or through a representative with authority to negotiate and settle the disputes, all sessions scheduled by the co-mediators. Non-debtor affiliates CCA (Bahamas) and CSCEC (Bahamas) shall be participants in the mediation,” Judge Gravelle wrote.

Her Order was issued after it was “determined that mediation may produce a mutually agreeable resolution of all or some of the issues” between Mr Izmirlian’s BML Properties vehicle and the Chinese contractor which is majority owned by the Beijing government.

CCA, together with the two Bahamas-domiciled entities, are the defendants presently liable and on the hook to pay Mr Izmirlian a damages award that is understood to have hit the $1.8bn mark. CSCEC stands for China State Construction and Engineering Corporation, which is CCA’s ultimate parent, and will also be a party in the mediation proceedings.

The two appointed mediators are bankruptcy court judge Vincent F. Papalia and Evan Chesler, an attorney with the US law firm, Cravath Swaine & Moore. The mediation must begin within 60 days of the November 13, 2025, order, but it is unclear what the prospects are for a successful resolution of all - or even some - of the disputes between the parties given the long-standing, deep-rooted animosity that has taken hold between Mr Izmirlian and CCA over the past ten years since the latter’s failure to deliver the project on time and on budget.

Neither Mr Izmirlian nor CCA replied to messages seeking comment before press time. However, Baha Mar’s original developer has seen his New York State Supreme Court verdict upheld by one appeal court to leave CCA with just one final chance to overturn the $1.8bn damages awarded against it by the New York Court of Appeals. The Chinese contractor previously said it should know this quarter whether it claim will be allowed to proceed.

Mr Izmirlian had this summer sought to 'pierce the corporate veil' and directly target CSCEC Holding Company through fresh litigation in a bid to collect on his then-$1.7bn judgment from CCA's parent, which has been accumulating interest on a daily basis

E-mails seen by this newspaper show that attorneys acting for Mr Izmirlian and BML Properties urged CCA Inc's "special committee", formed from the Chinese state-owned contractor's independent non-executive directors, to "make a ten-figure settlement demand on CSCEC Holdings now".

They asserted that Baha Mar's original developer "firmly believes that the best path forward is to confront CSCEC Holdings, not kowtow to it through a [Chapter 11 emergence] plan designed to benefit insiders to the detriment of non-insiders".

Brett Thiesen, vice-chair of the financial restructuring and creditors rights' group at the Gibbons law firm, told the "special committee's" counsel via a series of e-mails between August 8-10: "We requested that the special committee make a ten‐figure settlement demand on CSCEC Holdings now.

"The logic of this is obvious – it would massively benefit the estate to resolve its biggest liability and give CSCEC Holdings a path to continue to control the debtor…

"We remind you the estate owes its creditors fiduciary duties. The largest creditor [Mr Izmirlian], holding more than 99.99 percent of non‐insider claims, firmly believes that the best path forward is to confront CSCEC Holdings, not kowtow to it through a plan that is designed to benefit insiders to the detriment of non‐insiders.”

However, the "special committee" and its attorneys countered that the issue of whether there are viable claims against CSCEC Holdings is not so simple. Natasha Labovitz, an attorney with Debevoise & Plimpton, argued that "most if not all of the colorable claims... have limited or questionable viability".

She added that CCA's plan to emerge from Chapter 11 bankruptcy protection "contemplates a transaction under which a plan sponsor, whether CSCEC Holdings or some other purchaser, would acquire all of CCA’s assets for value".

And Elizabeth Adams, the sole "special committee" member, argued that "constructive engagement" with CCA Inc's parent was the best way to maximise recoveries for the latter's creditors including Mr Izmirlian. 

She added: "The special committee has not ruled out potential future litigation against CSCEC Holdings. I do not believe any of the steps taken by the special committee would preclude the special committee from pursuing litigation against CSCEC Holdings at the appropriate time if, in my reasoned judgment, the special committee should determine that doing so would be the best way to maximise value for the estate.

"Nonetheless, I believe that initiating litigation against CSCEC Holdings would be premature at this time and may not ultimately be necessary given the ongoing efforts to pursue a consensual resolution that could deliver meaningful value to the estate without the costs and delays of litigation."

As for Mr Izmirlian's bid to initiate his own litigation, Ms Adams added: "In my judgment, permitting BML Properties to pursue a veil-piercing claim against CSCEC Holdings at this time would be prejudicial to the efforts being taken by the special committee....

"Allowing BML Properties to proceed separately would divert the attention of CCA, BML Properties, CSCEC Holdings and their respective professionals away from global discussions that are already underway, which would likely delay, if not impede, the parties’ ability to reach a consensual resolution and hinder, rather than advance, progress toward a value-maximising outcome in this Chapter 11 case."