Baha Mar Developer Wins $1.6 Billion Verdict Over Construction Delays

BML Properties Ltd., the developer behind the Baha Mar resort in the Bahamas, secured a major legal victory when a New York judge awarded it $1.6 billion in a lawsuit against China Construction America Inc. (CCA). The lawsuit, filed in the Supreme Court of New York, accused CCA, a subsidiary of the Chinese state-owned China State Construction Engineering Corp., of intentionally concealing delays and ultimately sabotaging the Baha Mar project.

The Baha Mar resort, a massive $4.2 billion development, was plagued by delays that led to significant financial losses for BML. According to the ruling, CCA misrepresented the project’s timeline, pushing the developer into a liquidity crisis. The delays cost BML its $845 million investment and ultimately forced the resort into bankruptcy​.

The Charges

BML Properties claimed that CCA falsely assured the developer that construction would be completed by March 2015, knowing this deadline was unachievable. CCA's actions reportedly pushed BML into financial hardship, as the developer had made extensive preparations based on these assurances. BML had invested millions into room preparations, staffing, and even Super Bowl advertising, anticipating the resort’s opening​.

During the trial, Justice Andrew Borrok found that CCA’s executive team, including Tiger Wu, knowingly provided false completion timelines and failed to communicate critical information, such as the need for additional workers to meet deadlines. The court also heard evidence that CCA diverted $54 million intended for subcontractor payments to fund a competing Hilton hotel project​.

The Verdict

Following an 11-day bench trial, Justice Borrok ruled in favor of BML, awarding $1.6 billion, including the developer's $845 million investment, with interest accruing from May 1, 2014. The judge described BML’s witnesses as credible and consistent, while CCA’s defense was found to be conflicting and inconsistent with internal communications. The court also noted that CCA failed to substantiate its counterclaims against BML, which included accusations of over-leveraging debt​.

The court emphasized that CCA’s fraudulent conduct was established "beyond doubt," pointing to internal communications that revealed CCA's knowledge of the project's failings long before the public was informed​.

The Law Firms Involved

BML Properties was represented by a legal team from Susman Godfrey LLP, including Jacob W. Buchdahl, Elisha Barron, Tamar Lusztig, and Stephanie Spies. Additional counsel included Mark C. Zauderer and Jason T. Cohen of Dorf Nelson & Zauderer LLP​.

CCA, on the other hand, was represented by attorneys from Debevoise & Plimpton LLP, including Mark P. Goodman, Maura Kathleen Monaghan, and Morgan A. Davis. Despite their defense, CCA's arguments were ultimately dismissed by the court​.

What’s Next?

Following the verdict, a CCA spokesperson expressed disappointment, stating that the decision ignored key evidence of BML’s mismanagement and excessive borrowing. The spokesperson also confirmed that CCA intends to appeal the decision, indicating that the legal battle may continue​.

BML’s chairman, Sarkis Izmirlian, expressed gratitude for the ruling, praising Justice Borrok’s fair handling of the case. Izmirlian stated that BML plans to enforce the judgment with care, marking a significant step in the long-running dispute over the Baha Mar project​.