Hotels drops out of the Baha Mar development!
By Danny King
Delaware – Rosewood Hotels & Resorts has requested that a Delaware bankruptcy court void its Baha Mar licensing agreement. The developer of the unfinished Bahamas resort, Baha Mar Ltd., filed for Chapter 11 bankruptcy in June.
In a 420-page document filed on Wednesday, Rosewood said that the licensing agreement for the 200-room hotel should be voided immediately based on, among other factors, the inability of Baha Mar Ltd. to pay Rosewood since the June 29 bankruptcy filing. Also, Rosewood alleges that the developer falsely represented that it was the legal owner of the hotel real estate.
As of late Wednesday, Rosewood was the only hotel company indicating that it wants to be released from any connection to Baha Mar. The five-hotel development is slated to include the 1,000-room Baha Mar Casino Resort & Hotel, a 707-room Grand Hyatt, a 300-room SLS Lux, a 694-room Melia and the Rosewood. Morgans Hotel Group and its Mondrian brand pulled out of the project last year and was replaced by SBE and its SLS Lux brand.
“Baha Mar has extremely limited access to funding to perform its obligations under the Rosewood hotel agreements and in fact is not timely performing its obligations to Rosewood under the Rosewood hotel agreements,” Rosewood said in the filing, which was posted on the Baha Mar website. “Baha Mar has told Rosewood that it does not in fact own the land, and, a preliminary search performed on August 14, 2015, of the Bahamas Registry of Records reflected that Baha Mar did not own any real property when it entered into the Rosewood hotel agreements and still does not.”
Responding to Rosewood’s motion, Baha Mar Ltd. stated, “Under the U.S. Chapter 11 process, property of a debtor’s estate is protected by the automatic stay, and we will address this request for relief from the automatic stay with the bankruptcy court in due course. Unfortunately, as the motion itself makes clear, this action is a direct result of the efforts of the government of the Bahamas to both oppose the recognition of the Chapter 11 process in the Bahamas and pursue its current course of action, which has injected uncertainty and disruption, and prevented Baha Mar from moving forward in a productive manner to complete and open the resort.
Rosewood did not indicate what kind of damages it was seeking from Baha Mar Ltd. beyond being released from the licensing obligation, and a Rosewood representative declined to comment further.
Rosewood was not listed among Baha Mar Ltd.’s 20 largest creditors in its June bankruptcy filing, which indicated that the developer owed SBE $791,000. Baha Mar Ltd.’s largest creditor was its China-based general contractor, CCA Bahamas, which was owed $72.6 million.
Baha Mar, the most expensive private project in Bahamas history, broke ground in Nassau’s Cable Beach area in February 2011. The five-hotel project originally was scheduled to open to the public by the end of 2014.
The project was subsequently delayed multiple times, spurring the bankruptcy filing and contention between the developer and the general contractor, primary lender and the Bahamian government.