By Neil Hartnell From Tribune 242

Baha Mar’s main financier has slammed as “inflammatory” claims that it was engaged in a ‘conspiracy’ with the Government to oust the developer and Izmirlian family from the $3.5 billion project.

Attorneys for the China Export-Import Bank, in an August 7 letter to the Delaware Bankruptcy Court, followed the lead of their Chinese government-owned counterpart, China Construction America (CCA), in seeking protection from Baha Mar’s interrogation requests.

Alfredo Perez, of the Weil, Gotshal & Manges law firm, branded Baha Mar’s demands for documents and witness testimony on all his client’s interactions with the Christie administration post-June 29 as “unwarranted and inappropriate discovery”.

Employing a rationale similar to the one used by CCA in its separate demands for ‘protective Orders’, Mr Perez argued that what Baha Mar was seeking had no relevance to the China Export-Import Bank’s bid to dismiss the Chapter 11 proceedings in Delaware.

That action is due to be heard next Monday, and Mr Perez alleged that Baha Mar’s request for all communications between the bank and the Bahamian government had no connection to the basis of its dismissal motion – the argument that the Delaware Bankruptcy Court has no jurisdiction over a developer with a “much stronger connection to the Bahamas”.

Mr Perez argued that the China Export-Import Bank’s case had been strengthened by Justice Ian Winder’s decision not to recognise, and give effect to, the Chapter 11 action and associated stays in the Bahamas.

“The debtors’ [Baha Mar] discovery requests seek information that is wholly irrelevant given the narrowly focused motion to dismiss filed by China Export-Import Bank, which contends that the district of Delaware is not the appropriate forum for the debtors’ insolvency proceedings,” Mr Perez alleged.

“As noted in CCA’s letter, in response to relevance objections raised by CCA and China Export-Import Bank, the debtors alleged the existence of an unspecified ‘conspiracy’ between the Bahamian government, China Export-Bank and CCA.

“The debtors’ allegations in this regard are inflammatory and, in any event, are irrelevant to the matters before the court.”

Documents attached to Mr Perez’s letter refer to a Memorandum of Understanding (MoU) that Baha Mar believes is related to the court proceedings underway in both the Bahamas and Delaware.

The MoU, its contents and what it deals with, are not detailed in the two letters, but Baha Mar is seeking “full production” of communications between the Government and Chinese in relation to it.

An August 4 e-mail from Delilah Vinzon, a Milbank, Tweed, Hadley & McCoy attorney, who is acting for Baha Mar, said: “I did want to note that we consider the Memorandum of Understanding (MOU) to be related to the bankruptcy proceedings, including the US and Bahamian proceedings related to Baha Mar, and we expect full production of communications with the Bahamian Government related to the MOU.”

She reiterated a day later: “The court will necessarily consider whether the interests of debtors’ creditors are best served by proceeding with the Chapter 11 cases regardless of the Bahamian proceedings.

“China Export-Import Bank’s communications with the Bahamian Government related to all of these proceedings, including the MoU, are highly relevant to these issues, particularly in light of China Export-Import Bank’s extensive references to – and reliance upon – the Bahamian Government’s statements and actions in its Motion to Dismiss.”

Mr Perez, meanwhile, argued that the Government’s communications with the China Export-Import Bank had “no bearing” on the latter’s arguments as to why Baha Mar should not be allowed to reorganise under US Chapter 11 procedures.

“Even if this court identifies some tangential relevancy, that is outweighed by the significant burden responding to the debtors’ discovery requests would impose on China Export-Import Bank, in particular with respect to the deposition notice, as it purportedly requires a representative of China Export-Import Bank to travel from China to the US,” Mr Perez wrote.

“The debtors should not be allowed to use discovery and the authority of this court to gain access to information that may provide the debtors a tactical advantage in ongoing negotiations or, more importantly, in ongoing proceedings in the Bahamas, or to delay the Court’s ruling on China Export-Import Bank’s motion to dismiss.”

Mr Perez described Baha Mar’s Chapter 11 filing as “misconceived”, and warned that his client would not make available any documents or witnesses for examination.

He then argued that the bank was not subject to the US court’s jurisdiction – a similar argument to that proffered by CCA, and which Baha Mar has rejected.

Laura Davis Jones, a Baha Mar attorney, argued in an August 7 letter that CCA (and likewise the China Export-Import Bank) had voluntarily subjected themselves to the Delaware Bankruptcy Court’s jurisdiction via their filings and involvement in the Chapter 11 process.

Still, accusing Baha Mar of producing “red herrings”, Mr Perez and China Export-Import Bank cited objections to the developer’s discovery requests that mirrored those offered by CCA.

For more on this story go to: http://www.tribune242.com/news/2015/aug/10/bank-slams-baha-mars-inflammatory-conspiracy-alleg/

IMAGE: www.travellersbazaar.com

See also iNews Cayman related story and links published July 28 2015 “Baha Mar and CCA Bahamas statements” at: http://www.ieyenews.com/wordpress/baha-mar-and-cca-bahamas-statements/

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Published August 10 2015 “The View from Europe: Too big to fail – Baha Mar” at: http://www.ieyenews.com/wordpress/the-view-from-europe-too-big-to-fail-baha-mar/