Genting, a prominent Malaysian casino giant, is currently embroiled in a lawsuit filed by its partner in a Bahamas resort, alleging fraud and seeking $600 million in damages. RAV Bahamas, which holds a 22% stake in the Resorts World Bimini (RWB) property, has accused Genting of shifting over a billion dollars in liabilities onto the Bahamas property through what they describe as a “massive and coordinated fraud.”
The lawsuit, filed in the US District Court for the Southern District of Florida, claims that Genting has mismanaged the finances of the RWB operating entity, BB Entertainment, preventing any profits from being distributed to RAV. The lawsuit alleges that Genting has used BB Entertainment as a “financial wasteland” to conceal fraudulent activities.
The partnership between RAV and Genting was initially formed as a 50/50 venture in 2012 to develop RAV’s Bimini Bay property, leading to the construction of the RWB property on land owned by RAV. However, Genting later gained majority control, leading to RAV claiming that the estimated value of the resort is significantly less than the liabilities remaining on BB Entertainment’s financials.
RAV is seeking damages of over $600 million from Genting, a company valued at around $3.13 billion. The lawsuit claims that Genting’s accounting practices have burdened BB Entertainment with hundreds of millions of dollars in illegitimate debt, depriving RAV of the value of its contribution to the partnership.
BB Entertainment’s auditor has expressed doubts about the future of the partnership, as RWB has consistently incurred losses since its inception in 2012. The partnership recorded a loss of $151.28 million for the year ending Dec 31, 2022, an increase from the previous year’s losses of $114.2 million, bringing its total liabilities to $885.2 million.
In response to the lawsuit, Genting has stated that they believe the complaint is baseless and without merit, and they intend to vigorously defend against it. The company has indicated that they will provide further comments as the situation unfolds.
Overall, the lawsuit between Genting and its partner in the Bahamas resort highlights the challenges and disputes that can arise in business partnerships, particularly when financial mismanagement and allegations of fraud are involved. The outcome of this legal battle will likely have significant implications for both parties involved and may impact the future of their partnership.