Ankura’s client BML Properties, Ltd. (BMLP) received a $1.6 billion judgment after an 11-day bench trial in the Supreme Court of the State of New York in a long-running fraud lawsuit against China Construction America Inc. (CCA) arising from the development of the Bahamian luxury resort Baha Mar.
According to the Court’s decision, Ankura’s Steven Collins, BMLP’s expert witness on the subject of construction management, “credibly testified to the owner’s dependence on the construction manager to accurately track manpower, resources, and the Project’s overall progress.” The decision quotes Mr. Collins’ testimony, “there was never a realistic, fully-developed, manpower-loaded schedule for the resources to achieve the March date.” Mr. Collins’ testimony also refuted the construction manager CCA’s argument that the presence of owner personnel on the project was sufficient to ascertain the status of work progress. Mr. Collins ”credibly testified” that the owner’s presence on the property was insufficient to put BMLP on notice the project was not on schedule.
BMLP developed the multibillion-dollar resort complex and hired CCA in 2011 as the construction manager and general contractor for the project. However, CCA was alleged to have deliberately misled BMLP regarding its intentions and ability to complete and open the resort to paying guests by March 2015, as planned and agreed to by both parties. Despite obligations to BMLP, CCA diverted substantial “resources and manpower to competing projects, concealing those diversions, and even engaging in outright sabotage of the Project,” the Court determined.
The Baha Mar Chapter 11 bankruptcy filing in June 2015, just three months after the resort’s failed opening, was “a foreseeable and natural consequence” of CCA’s failure to get the project back on track, according to the Court’s decision. The $1.6 billion verdict includes $845 million in fraud damages, plus pre-judgement interest from May 2014.
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