Managing partner for Deloitte and Touche Bahamas Raymond Winder said Baha Mar’s decision to file for bankruptcy was motivated by many smart reasons.
On Sunday’s Jones and Co. Talk Show, Mr. Winder gave his input on matters concerning Baha Mar, following the CEO of the $3.5 billion resort’s announcement that it filed for Chapter 11 bankruptcy in a U.S. court.
Mr. Winder said he is aware that Bahamar CEO Sarkis Izmirlian filed for Chapter 11 bankruptcy for several different reasons.
His first reason was that Mr. Izmirlian would still be able to control the business rather than being under provisional liquidation in The Bahamas, whereas there is a possibility that the business can be transferred to an independent party.
“Filing for bankruptcy under Chapter 11 is what we call pre-petitioned liabilities and post-petition liabilities, which mean that those liabilities that were placed prior to the filing of the petition, one can say compromised in the sense that the possibility exists that they may not get 100 per cent payment for each dollar,” he said.
“Liabilities that are incurred post this process will receive 100 per cent. I assume that before Sarkis decided to put in the additional funds, he wanted additional protection for the funds that are being placed into the business. Chapter 11 would’ve given him that protection whereas, in The Bahamas, that would’ve had to be negotiated.”
Last week Friday, Baha Mar issued a statement noting that the action by the government to seek a winding up petition against the resort is unnecessary and reactionary.
The statement explained that the winding up petition puts the staffs’ assets at risk and jeopardizes the future of the resort.
Mr. Winder said he disagrees with that part of the statement and thinks the government is making a good move.
“I wouldn’t agree with that statement,” he said.
“I assume negotiations will continue even during the process of the provisional liquidation and it should continue. The reason why you have a provisional liquidity is because you don’t have an agreement and I assume that as soon as an agreement is reached then that would result in the provisional liquidity being removed. What this does is allow the project to continue in terms of preparing the property to open at some point in time in the future, rather than having everything at a standstill until everyone comes to an agreement. So this is a good move on behalf of the government.”
