In a significant legal ruling, BML Properties Ltd., the original developer of the Baha Mar casino resort in the Bahamas, has been awarded $1.6 billion after a New York judge found China Construction America Inc. (CCA) guilty of extensive fraud. The verdict restores BML’s $845 million investment in the ambitious resort and includes interest dating back to May 2014.
The decision was handed down by Judge Andrew Borrock after an 11-day trial in Manhattan in August. The court found that CCA, a subsidiary of the state-owned China State Construction Engineering, had committed “fraud beyond any doubt,” breaching its contractual obligations and effectively causing the project’s collapse in 2015.
“This is a major vindication for Mr. Izmirlian,” said Jacob Buchdahl, lead attorney for BML Properties, quoted by Bloomberg, referring to Sarkis Izmirlian, the Bahamian businessman behind BML. “It’s been a long time coming.”
Baha Mar Project and Collapse
The Baha Mar resort, a massive development on the northern coast of New Providence Island, was one of the largest and most anticipated projects in the Caribbean. Initially envisioned over two decades ago, it was set to include three luxury hotels with a combined 1,800 rooms, a Jack Nicklaus-designed golf course, a spa, a convention center, and the largest casino in the Caribbean. Baha Mar was intended to boost the Bahamian economy, but construction delays plagued the project.
Izmirlian first secured funding for the project in 2008, amidst the global financial crisis, by securing $2.45 billion from China’s Exim Bank. However, the financing deal included a condition that CCA, a Chinese contractor, would serve as the general contractor for the project. Despite the agreement, CCA failed to meet its December 2014 deadline to complete construction, and by June 2015, BML Properties was forced to file for bankruptcy. By then, the resort was said to be 97% complete.
BML accused CCA of intentionally delaying the project to secure additional fees and to position itself to take control of the development. The court found that CCA had manipulated its role to enrich itself, creating a cascade of issues that ultimately led to the project’s failure.
Legal Battle and Ruling
BML Properties sued CCA in 2017, claiming the contractor engaged in “massive fraud.” BML argued that CCA misrepresented its ability to meet the project’s deadlines, while simultaneously submitting inflated bills and performing substandard work. BML also alleged that CCA workers were caught smuggling documents and computers from the project’s offices, some of which indicated admissions of poor workmanship.
Judge Borrock’s ruling sided with BML, determining that the contractor’s fraudulent actions had led directly to the collapse of the project. CCA has announced plans to appeal the ruling, calling the judgment “deeply flawed.”
Baha Mar’s New Ownership and Completion
Following the collapse of BML’s involvement, the Bahamian government stepped in, appointing a liquidator to manage the project’s assets. Construction halted for over a year before Hong Kong-based Chow Tai Fook Enterprises, a jewelry and real estate conglomerate, acquired the project in 2016. Chow Tai Fook invested $200 million into completing the resort, which finally opened its doors in April 2017.
The acquisition by Chow Tai Fook raised eyebrows due to the company’s longstanding ties with the Chinese government. The purchase price of Baha Mar was never publicly disclosed, but industry insiders speculated that Chow Tai Fook acquired the resort at a significant discount.
Today, Baha Mar is a fully operational resort, featuring a world-class casino, luxury accommodations, retail outlets, and a wide range of dining and entertainment options. The project, now a key part of the Bahamian tourism landscape, hosts one of the Caribbean’s largest casinos and remains a major draw for international visitors.
