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Bahamas Developer Sues Contractor for $2.25B

Tuesday, January 9, 2018

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A Bahamas developer is suing China Construction America Inc. for $2.25 billion in damages in relation to the bloated and delayed $3.9 million Baha Mar resort, charging the firm with submitting fraudulent bills and collecting undeserved fees.

The Suit

In a suit filed with the New York Supreme Court late last month, BML Properties Ltd., the original developer at The Bahamas site, alleges that CCA, which was serving as the contractor and construction manager, used the project as a beachhead to train unqualified staff and intentionally dragged the project beyond deadlines in order to claim more money.

Danny King, BB-CY-SA 4.0, via Wikimedia Commons

A Bahamas developer is suing China Construction America Inc. for $2.25 billion in damages in relation to the bloated and delayed $3.9 million Baha Mar resort, charging the firm with submitting fraudulent bills and collecting undeserved fees.

BML alleges in the 259-page complaint that CCA’s behavior is what caused the initial project to collapse, allowing the most expensive resort to be built in the Caribbean to miss two travel seasons.

The original project fell through in 2015, after the December 2014 deadline. The suit says:

"CCA's entirely undisclosed and fraudulent intent in 2012 and thereafter included a plan to delay 'opening' of the Project until it could negotiate its way out of the disputes it knew would arise and concerning which it believed it had material exposure … As the project moved into late 2014 and early 2015, CCA as well undertook to sabotage forward progress of the work, intentionally damage and disable life-safety, security and electrical supply systems to try to compel BML Properties and Baha Mar Ltd. to accede to its demands on sham payment applications and on fraudulent 'commercial claims,' stage labor walk-offs when it was already critically delayed in delivering the Project, intentionally slow-down work at the Project (a fact admitted by CCA's executive at a meeting with the then Prime Minister of The Bahamas in April 2015), and divert equipment and executive and labor effort to its newly purchased competing project just a few miles from the front door of Baha Mar.”

(Baha Mar is now owned by Hong Kong-based Chow Tai Fook Enterprises Ltd., and finally opened in April 2017.) BML declared bankruptcy in 2015.

About CCA

CCA is a subsidiary of Shanghai-based China State Construction Engineering Corp. Ltd., and has been the prime contractor on a number of popular building projects in New York including New York's City Hall, the Alexander Hamilton Bridge, the 11 Times Square Office Building, the Brookfield Place Winter Garden Glass Pavilion and Buildings 92 & 77 at the Brooklyn Navy Yard.

CCA has yet to comment on the filing.

   

Tagged categories: Commercial Construction; Ethics; Fraud; Laws and litigation; Lawsuits

Comment from Michael Kramer, (1/9/2018, 3:31 AM)

What a surprise. I feel for the more than 1,000 claimants who were screwed when the development went under in 2015. They will never be made whole regardless of any litigation.


Comment from Dick Piper, (1/9/2018, 8:40 AM)

If you hire a Chinese company you have to expect major problems.


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