National

China Construction America Files for Bankruptcy

U.S.A. – China Construction America has filed for chapter 11 bankruptcy protection in New Jersey, just weeks after Sarkis Izmirlian’s crippling $1.6b damages win in a U.S. Court.

Published

1 year ago

December 23, 2024

Berthony McDermott

U.S.A – China Construction America has filed for chapter 11 bankruptcy protection in New Jersey, just weeks after Sarkis Izmirlian’s crippling $1.6b damages win in a U.S. Court.

In the filing, China Construction America Chairman and CEO Yan Wei said the bankruptcy filing was ultimately necessitated by a crippling $1.6 billion judgment issued by a New York Supreme Court and entered on October 31st, 2o24 against CCA and two non-debt affiliates and in favour of BML Properties Limited.

It comes after the appellate division of the New York Supreme Court dismissed CCA’s motion and lifted an interim stay granted in November.

The affidavit reads, “CCA’s financial challenges, which began in 2015, were caused by several factors outside of its control, including a broad retreat from, and policy changes negatively impacting, Chinese investment in U.S.-based construction projects.”

It continues, “these business headwinds were further exacerbated by the 2017 commencement of the Baha Mar litigation and the allegations made by BML therein, which undermined CCA’s ability to win and execute new business.”

Wei also detailed in the filing that like many other debtors who have sought chapter 11 protection in the face of a significant adverse judgment, CCA is seeking a breathing spell.

The breathing spell is to address its ongoing and deepening financial distress, preserve the value of its estate for the benefit of all stakeholders, continue its business operations in the ordinary course, expeditiously pursue its meritorious appeal and ensure a fair and equitable resolution of all claims.

Sarkis Izmirlian’s BML Properties Limited was awarded $1.6b against CCA and affiliated companies back in October.

New York Supreme Court justice Andrew Borrok ruled that Chinia State Construction Engineering Corporation Bahamas committed material breaches of the parties investor’s agreement, by requesting $54m BML to pay subcontractors, but instead used it to purchase the Hilton Hotel in downtown Nassau.

China State Construction Engineering Corporation Bahamas and CCA Bahamas are listed as defendants in the matter.

CCA Bahamas owns British Colonial and Margaritaville Beach Resort; the two did not file for chapter 11.

Wei says the recent ruling in NYC was wrong and believes it will be reversed once the appeal is heard.