Creditor Requests Examination of China Construction America Amid Fraud Allegations
A creditor of China Construction America Inc. (CCA), the US arm of China's largest construction company, has filed a motion in US bankruptcy court seeking an examiner to investigate potential fraud and misconduct.
BML Properties Ltd., the largest unsecured creditor in the case, alleges that CCA may have committed fraud beyond doubt. This stems from a previous court ruling in October 2022, where CCA was ordered to pay $1.6 billion to BML due to fraud related to the delayed Baha Mar casino resort in the Bahamas.
The examiner's investigation would focus on CCA's dealings with affiliated companies, particularly surrounding the Baha Mar dispute and the subsequent bankruptcy filing. The creditor alleges questionable acts, including financing requests from CCA's parent company.
Despite losses associated with the Baha Mar project, CCA maintains that these losses are unrelated to its operations and that BML is not entitled to a refund. The bankrupt firm has no funded debt but faces approximately $700 million in surety-bond obligations, which could become due if projects are not completed.
The payment owed to BML includes $830 million invested in the Baha Mar project in 2011, along with accrued interest. The case is currently ongoing in the U.S. Bankruptcy Court District of New Jersey (Trenton).