China Construction America, once said to be contractor for Vanderbilt Yard platform, found liable for $1.6 billion in Bahamas construction dispute.

As I reported in June 2022 (link), master developer Greenland USA confirmed it had signed a contractor to build the platform over the Vanderbilt Yard, one a Greenland rep said had "tremendous amounts of experience working with directly with the Long Island Rail Road."

The contractor was identified in meeting notes from an Atlantic Yards/Pacific Park Quality of Life meeting: a joint venture with Plaza Construction and China Construction of America, or CCA.

Both are state-owned, essentially. China Construction of America is a subsidiary of Beijing-based China State Construction Engineering Corp. Ltd. (CSCEC), and in 2014 acquired Plaza Construction, which was founded in 1986 and continues to operate under that name. CCA does have experience working with the LIRR.

It's unlikely that Greenland will resurrect its plan, given that it seems ready to lose development rights to six tower sites over the railyard, which require the two-block platform.

Greenland, in documents I've seen, has protested the Metropolitan Transportation Authority's slowness in responding to submitted plans and its requests for more documents and financial assurances. Maybe that protest was warranted, maybe not. 

A new legal decision, though, casts doubts on CCA's business practices.

About that decision

As Global Construction Review reported Oct. 25,  Judge orders Chinese contractor to pay $1.6bn over Baha Mar resort. 

That references a decision by New York State Supreme Court Justice Andrew Borrok in a lawsuit filed by BML Properties, regarding a delayed Bahamas resort, after an 11-day nonjury trial in August.

The plaintiff, wrote the judge, proved that CCA "breached the Best Interests Obligation... of the Investors Agreement" at least six times and committed at least four instances of fraud, so BML Properties lost its entire $845 million investment and deserved ten years of interest.

While the testimony of the plaintiff's witnesses "was credible and consistent with the contemporary documents," the "defendants’ witnesses’ testimony by contrast was often inconsistent with their own internal communications or otherwise confirmed their many instances of breach and fraud," the judge wrote.

One board member testified he "was not even aware of the Best Interests Obligation (i.e., the obligation to act in the best interests of BML)," according to the decision. 

That board member, Tiger Wu, was "hopelessly conflicted" since a company he led not only was the project's construction manager and general contractor but also secretly acquired a competing project, using money that was supposed to be used to complete the BML job.

The decision quotes a letter from Wu saying the project was severely late, imploring that a parent company add "skilled workers and experienced management personnel to the site." Meanwhile, the company was reassuring BML that all was on track.

CCA defense

CCA told Engineering News-Record: “CCA Construction Inc. was neither the contractor for nor an investor in the Baha Mar project, and, like its co-defendants, it intends to appeal the court’s decision, which is deeply flawed under well-settled principles of New York law."

 (The judge found that various affiliated companies of CCA shared ownership, officers, and directors, commingled assets. were not treated as separate profit centers, and otherwise conflated their corporate identities. So he found they operated as a single economic entity.)

CCA's added, in defense of its affiliates: "The decision ignores indisputable evidence that BML Properties overborrowed, overspent and overextended itself and then drove the project into a wrongful, secret bankruptcy to eliminate its obligations at the expense of other stakeholders, including minority investor CSCEC Bahamas and construction manager CCA Bahamas, which made tireless efforts to complete the Baha Mar project on time and within budget.”