2nd Oct 2015
Simon Davenport QC led a team from 3 Hare Court who were part of the international team of lawyers which has successfully obtained the dismissal of Chapter 11 Bankruptcy Proceedings in the US arising out of the multi-billion dollar Baha Mar Resort development in the Bahamas. The team, which included attorneys from US firms Squire Patton Boggs and Young Conaway, and Bahamas firm McKinney Bancroft & Hughes, acted on behalf of CCA Bahamas Limited, the principal construction company of the development. In a joint Motion to Dismiss with another major creditor, CCA Bahamas sought dismissal of the proceedings in the Bankruptcy Court of Delaware in favour of insolvency proceedings in the Bahamas. Simon Davenport QC was granted pro hac vice rights of audience to appear as Co-Counsel at the hearing of the Motion to Dismiss in Delaware on 28 August 2015.
The bankruptcy petitions were filed by the debtor companies which own the incomplete resort, all of which are registered in the Bahamas, save for one which is incorporated in the state of Delaware. The multi-billion dollar mega-resort, which will include four hotels, a casino, conference centre and elite golf-course, is expected to provide 5,000 jobs and generate 12% of the GDP of the Bahamas once complete.
In his Opinion, Bankruptcy Judge Kevin J. Carey was persuaded by CCA that it was in the best interests of the opposing creditors to exercise his discretion to dismiss the petitions, despite the Judge accepting that the debtor companies had been entitled to file for bankruptcy in the US and had not acted in bad faith by doing so.
Ordering the dismissal of all of the petitions except that of the one Delaware-incorporated debtor, the Judge accepted the submissions of Simon Davenport QC that restructuring could be achieved within the insolvency framework of the Bahamas through provisional liquidation, contrary to the debtors’ strongly contested position that Bahamian insolvency law limited the options for restructuring. The Judge also recognised that whilst the resort was a truly international project the central focus of the proceedings remained the site of the development in the Bahamas, and that allowing the bankruptcy proceedings to proceed in the Delaware court would lead to further litigation and ultimately delay yet further the completion of the development.
The decision of the Delaware Bankruptcy Court has been widely reported including by the Wall Street Journal.