The development company behind a new Bahamas resort complex with a price tag of $3.5 billion has now filed for bankruptcy protection. Baha Mar Ltd filed on Monday, stating a Chinese contractor was the reason behind the need for protection, after construction delays continued to take place. Due to the delays, the company owed millions every month to employees who were without active employment.
Based in the Nassau, the Baha Mar group is led by Sarkis Izmirlian, a businessman of the Bahamas. Izmirlian agreed to continue providing funds for the project during the chapter 11 case. The project is to include four hotels plus a casino and convention center.
After missing a deadline to open last November, the China Construction American company promised the resort would be ready to open by April. Due to this fact, Baha Mar place over 2,000 employees on retainer which cost $4 million a month. The company then began to market the resort, promoting the opening, purchased food and stocked the vault of the casino with millions in cash. The property also took room reservations and after the opening was delayed yet again, had to refund $6 million to customers.
All of these extra costs drained the cash of the company and forced them to file chapter 11 bankruptcy. There is still no opening date set which would continue to set the company back. Izmirlian stated that he is committed to doing what he ‘realistically’ can to help move the project forward, agreeing to invest more of his funds to cover the cost of delay.
The China Construction American company have yet to comment on the subject. In previous interviews with the Wall Street Journal, a spokeswoman for the company commented that laying blame on the construction company for the decision to delay the announced opening of the project is inappropriate and inconsistent with the history of the project.
In the bankruptcy court filings on Monday, the Baha Mar listed their assets as $3.1 billion and liabilities of $2.7 billion. Additional liabilities of the company include $123 million the company owes to vendors and trade creditors as well as $140 million due to the China Construction America company.