Bahamas Supreme Court denies recognition Baha Mar filing for U.S. bankruptcy

"Our Government has argued firmly that a Bahamian Court, supervising the work of an independent liquidator, is best suited to oversee the restructuring, completion and opening of the resort should Baha Mar, China Construction and Exim Bank be unable to reach an out-of-court agreement," the government said.

On June 29, Baha Mar Ltd. filed a petition with a federal court in Delaware for protection under Chapter 11 of the U.S. Bankruptcy Code "due to the financial consequences of the repeated delays by the general contractor, and the resulting loss of revenue."

Bahamian Prime Minister Perry Christie said in response that his government will pursue liquidation proceedings to seize control of Baha Mar and bring it to completion for more than 2,000 employees of the resort are Bahamian nationals.

The Supreme Court's decision sets the stage for a provisional liquidator to be appointed by the Court on July 31, 2015, should no agreement be reached between the parties.

"The provisional liquidator would be lawfully bound to have regard to the best interests of the Bahamian people, Baha Mar employees, Bahamian contractors, creditors, and investors in Baha Mar," the Bahamian government said.

Baha Mar reacted in a statement on Wednesday to the court's decision by claiming it was "disappointing. "We do not believe today's ruling, for which the Government strenuously argued, assures the necessary protection of the assets of Baha Mar, and we do not believe that it is best for the over 2,500 current employees of Baha Mar," Baha Mar said.