A New York appeals court has upheld $1.6 billion in damages for the developer of a failed Bahamas resort project. The court agreed that China Construction America defrauded Sarkis Izmirlian.
Last fall, the state Supreme Court ruled that Izmirlian, original developer of the Baha Mar resort in Nassau, Bahamas, was defrauded by contractor China Construction America (CCA), a subsidiary of China State Construction Engineering Corporation (CSCEC) and construction manager for Genting’s Resorts World New York.
In the October ruling, Justice Andrew Borrok found that CCA “knowingly and falsely” promised to meet development deadlines when aware it was unable to do so. In addition, he said, CCA repeatedly breached its best-interest agreement, committed multiple acts of fraud and engaged in “outright sabotage” of the planned megaresort.
The debacle ultimately forced Izmirlian’s BML Properties (BMLP) to file Chapter 11 bankruptcy. Two years later in 2016, Hong Kong conglomerate Chow Tai Fook Enterprises bought Baha Mar, completed it and continues to operate it.
With interest, damages continue to grow
In its appeal, CCA sought reversal of what it called a “deeply flawed decision”.
It argued that BMLP “brought about its own losses through its own irresponsible actions”, including “overborrowing, overspending and overextending itself”. Furthermore, CCA claimed, BMLP “unilaterally and secretly [put] the project into a wrongful bankruptcy behind the backs of its partners and the Bahamian government”.
But on 8 April, the New York court found “no basis to disturb the trial court’s award”. It upheld $1.6 billion (£1.2 billion/€1.5 billion) in damages to the Swiss developer. With 9% interest accrued daily, the total has now climbed to more than $1.7 billion.
In a statement published by the Nassau Tribune, Izmirlian thanked the appellate court and vowed to collect. “We are continuing in our efforts to aggressively enforce our rights against CCA, its parent CSCEC, their affiliates and all those who orchestrated the fraud,” he said.
“We hope that they will come to their senses and enter into a rapid settlement to minimise the disruptions to their operations that have been caused by their actions.”
Baha Mar plans $350M expansion
Meanwhile, Baha Mar is now a leading Nassau casino resort. The beachfront complex is planning a $350 million expansion that will break ground in 2026 and open in 2029.
Spanning 12 waterfront acres, the development will include 350 rooms and 50 villas “overlooking the incredible turquoise Bahamian waters of Cable Beach”, according to a news release. It will add four restaurants, a 14,000-square-foot spa and 25,000 square feet of indoor and outdoor event space, including two ballrooms and other amenities.
Baha Mar president Graeme Davis called the investment “a catalyst for continued economic growth and job creation in the Bahamas”.
