Baha Mar developer files lawsuit against its contractor

In the complaint submitted to the Supreme Court of the State of New York, Sarkis Izmirlian, developer of Baha Mar seeks over USD 2.25 B in damages from state-owned China Construction America (CCA), and refers to what happened as “one of the largest construction-based frauds in this hemisphere.”

The suit by developer Sarkis Izmirlian’s vehicle BML Properties Ltd., Baha Mar’s owner until it was manoeuvred off the scheme, alleges that CCA never intended to finish the project on time and budget but instead used it as a “beachhead” in the Americas and the Caribbean to train unqualified staff for other projects in the region.

It alleges that CCA sabotaged progress and actively sought to get rid of Mace International, the London-headquartered consultancy hired to supervise CCA.

Further, the plaintiff claims CCA submitted sham billings totaling hundreds of millions of dollars.

Hailed as the biggest leisure development in Caribbean history, the hotels and casino complex failed to open as planned at the end of 2014, and in June 2015 Izmirlian filed for bankruptcy protection to avoid liquidation. The complaint alleges that the revenues lost in the delay led to the bankruptcy filing.

CCA’s “breaches of contract and malicious and intentional acts of deceit in utter disregard for the interests of BML Properties resulted in the severe liquidity crunch of March through June 2015,” said the complaint, seen by GCR. This, said the complaint, also led to the loss of Izmirlian’s entire $845m equity stake in the project.

CCA has denied the allegations, calling the lawsuit “a vindictive and baseless attempt to redeem his own failures to properly manage his companies and their investment in the Baha Mar resort project”.

“Mr. Izmirlian’s scattershot allegations are totally false and constitute a gross abuse of the American judicial system,” said a CCA statement. “CCA Bahamas will vigorously defend these unfounded claims.”