The contractor said the Baha Mar case belongs in the courts of the Bahamas, not in the United States.

July 22 A judge in the Bahamas has declined to recognize the U.S. bankruptcy filing by Baha Mar Ltd, the developer of a $3.5 billion mega resort, a source familiar with the ruling said on Wednesday.

The decision effectively prevents the developer of the unfinished Baha Mar resort from protecting its assets from creditors.

“We respect Justice Winder’s ruling and look forward to understanding his reasoning, but we are nonetheless disappointed by the result”, Baha Mar Ltd said in a statement Wednesday.

Once financial terms are agreed, we anticipate that all-party talks – in which our Government will be an active participant – can reconvene, leading to the resumption, completion and opening of the Baha Mar development.

The Bahamas has petitioned the islands’ Supreme Court to wind up Baha Mar and appoint a provisional liquidator to oversee the restructuring and opening of the repeatedly delayed resort if an out-of-court agreement can’t be negotiated. We are confident today’s decision will encourage all parties to focus on these goals. “We are even more disappointed in the way the Government has responded to our Chapter 11 filing over the past several weeks”.

FILE – In this February 21, 2011 file photo, Baha Mar Resorts CEO Sarkis Izmirlian, center, stands between Export-Import Bank of China President Li Ruogu, left, and Bahama’s Deputy Prime Minister Brent Symonette during the groundbreaking ceremony for a Baha Mar resort in Nassau, Bahamas.

In a statement on Tuesday, quoted by the Wall Street Journal, Baha Mar Ltd said it would oppose the motion to dismiss but added that it wants “to achieve a consensual resolution of the issues” and is in ongoing discussions with both the contractor and the lender. The five-hotel project originally had been scheduled to open to the public by the end of 2014 but has been marred by delays since, though it is said to be 97% complete.