The owners of the Baha Mar resort in the Bahamas announced plans to file for bankruptcy in the U.S. yesterday.
Citing "the financial consequences of the repeated delays by the general contractor," Sarkis Izmirlian, Chairman and Chief Executive Officer of Baha Mar Ltd., announced that the company would reorganize under Chapter 11 of the Bankruptcy Code in order to complete construction as soon as possible.
The Baha Mar resort will consist of five hotels: the Baha Mar Casino & Resort, Grand Hyatt at Baha Mar, Rosewood at Baha Mar, the SLS LUX at Baha Mar, and the existing Melia Nassau Beach, which will continue to operate during the bankruptcy. Other features include 200,000 square feet of indoor and outdoor meeting space, a golf course, and more than 40 restaurants and bars.
Originally set to open in December 2014, Izmirlian said in a statement that the general contractor, China State Construction, guaranteed the resort would be ready to open by March 27, 2015. As a result, Baha Mar began hiring and training some 2,000 workers, and making other purchases necessary to open.
"When we subsequently found out that the March 27 deadline was not feasible because the general contractor had still not completed construction, rather than simply downsizing, we maintained our employment levels in anticipation of a revised opening date," Izmirlian said. "Utilizing our financial resources, [we continued] to pay employees to continue their work at the project and participate in volunteer activities around the island for the benefit of the country."
No revised opening date has been set, and Reuters reports that court documents suggest haha Mar may soon sue its contractor.
The bankruptcy filing, which includes an $80 million debtor-in-possession line of credit, will enable the resort to continue meeting expenses while working to resolve the problems with its contractor. However, Izmirlian said that if no resolution is reached within a few weeks, it may have to resort to layoffs.
"I want to thank the government of The Bahamas and the Prime Minister in particular for their efforts on behalf of Baha Mar and deeply appreciate their support," he added. "They, like us, want Baha Mar to succeed and for this resort to be as magnificent as planned. The process on which we now are embarking is a path, not a destination, for us to achieve our priority of completing construction and opening Baha Mar as a leading premier international resort in The Bahamas."