The ruling followed a two-week non-jury trial in August.

As ENR reported in 2018 when BML Properties Chair and CEO Sarkis Izmirlian filed its lawsuit against China Construction America, the developer had asserted that, as the project neared completion, the contractor worked to "falsely create the appearance that it was working toward an on-time and on-budget opening ... while knowingly and fraudulently concealing its real intent not to construct the project on time and on budget and in the process extort more money than it earned and was due.”

Multiple entities were listed as defendants, including China Construction America Inc. (now known as CCA Construction), CCA Construction Inc., CSCECBahamas, Ltd., and CCA Bahamas Ltd.

In his ruling, Borrok affirmed the developer's claims of breach of contract and fraud, and ordered China Construction America to pay the $1,6-billion restitution. That dollar amount is based on BML's stated loss of $845 million, along with interest dating back to May 1, 2014, the date when the judge determined the contractor's first breach of its "best interest obligation" to the developer occurred.

In his ruling, Borrok wrote that BML Properties "more than met its burden in proving" that a board member of China State Construction Engineering Co. Bahamas (CSCECB) "breached the Best Interests Obligation ... no fewer than six times and ... by clear and convincing evidence committed at least four instances of fraud."

BML Properties' statement regarding the ruling noted, "The size of the verdict not only demonstrates the scale of the loss to the Izmirlian family but the extent of the wrongdoing by CCA."

In a statement provided to ENR, a spokesperson for China Construction America commented, “CCA Construction Inc. was neither the contractor for nor an investor in the Baha Mar project, and, like its co-defendants, it intends to appeal the court’s decision, which is deeply flawed under well-settled principles of New York law."

CCA's statement continues: "The decision ignores indisputable evidence that BML Properties overborrowed, overspent and overextended itself and then drove the project into a wrongful, secret bankruptcy to eliminate its obligations at the expense of other stakeholders, including minority investor CSCEC Bahamas and construction manager CCA Bahamas, which made tireless efforts to complete the Baha Mar project on time and within budget.”

The Liquidity Crisis

Judge Borrok was not persuaded by CCA's arguments in court and found that the contractor's actions were intended to "cause a liquidity crisis pushing [the developer] out of its $845 million investment," he wrote, adding: "This is exactly what happened."

BML argued—and the judge concurred—that he bankruptcy was brought about, partly, via a $54-million payment from the developer to contractor CCA Bahamas as the project was nearing completion. The developer argued that the contractor said the money was needed to help pay subcontractors as the mega-resort project was nearing completion and, critically, a scheduled opening date.

The judge again sided with BML, stating in his ruling that defendants "committed fraud by making the representation that they needed a $54-million payment so that they could pay subcontractors. The evidence ... established they did not need it or use it for that purpose."

Instead, citing the testimony of forensic accountants who testified on behalf of BLM Properties, the judge stated that defendants "wanted it and used it to buy a competing hotel development down the road," the British Colonial Hilton in Nassau, Bahamas.

In its statement, BML further commented that, "rather than paying subcontractors, [CCA Bahamas] secretly cut hundreds of workers during the critical run-up to the project’s grand opening, diverted resources and key personnel to Panama to start a new project rather than finish Baha Mar, [and] intentionally slowed and stopped work on Baha Mar in attempts to extort exorbitant and illegitimate payments ... with catastrophic effects on Baha Mar."

Construction halted in 2015, and in June of that year Baha Mar Ltd. filed for bankruptcy protection in the U.S. Bankruptcy Court Delaware District, an action that CCA Bahamas fought to dismiss. 

Opened in April 2017, the Baha Mar resort is now owned by Chow Tai Fook Enterprises, Hong Kong.