COMPLYING with a recent order to show cause issued by Federal Bankruptcy Court Judge Robert J. Faris, Imperial Pacific International LLC on Wednesday submitted proof that it has renewed or replaced its recently expired liability insurance policy.
Through attorney Allison Ito, IPI submitted Public Liability Insurance Policy No. 2302123 from Saipan-based Pacific Basin Insurance Company, covering the period from May 10, 2025 to May 10, 2026. The filing was made with the U.S. Bankruptcy Court for the District of Hawaii, where IPI’s Chapter 11 case is being heard.
IPI also submitted a copy of the payment receipt for the policy premium and the 5% Business Gross Revenue Tax, totaling $17,745.
In addition, IPI provided the court with a copy of its Workers’ Compensation Insurance Policy, which covers 26 employees for the same period, May 10, 2025 to May 10, 2026. IPI said it paid the policy premium, totaling $29,152, by check to Pacific Basin.
Last week, Judge Faris ordered IPI to show cause why its Chapter 11 case should not be dismissed or converted to Chapter 7. He instructed IPI to submit proof that it had renewed or replaced its expired liability insurance by June 19. Failure to do so, he said, would result in dismissal of the case without further notice or hearing.
IPI operated a casino on Saipan for four years until March 2020, when it shut down due to the Covid-19 pandemic.
On April 19, 2024, IPI filed for Chapter 11 bankruptcy protection, citing more than $165.8 million in liabilities.
Unlike Chapter 7, which involves liquidation, Chapter 11 allows a company to reorganize while continuing operations.
On Feb. 26, 2025, Team King Investment (CNMI) LLC was the successful bidder for IPI’s casino assets in a court-approved auction. Judge Faris approved the sale on April 29, 2025, after the parties reached a stipulation resolving creditor objections.
However, in his recent show cause order, Judge Faris noted that IPI reported having little or no cash and was unable to renew its public liability insurance when it expired. In addition, security guards protecting IPI’s properties have not been paid for about a month.
In a previous court filing, IPI stated that the Commonwealth and Team King were “at an impasse” regarding the assignment of the company’s ground lease agreement (LA 15-002S) with the Department of Public Lands, which covers approximately 19,204 square meters of land.
Specifically, DPL has declined to execute the lease assignment, which must be recorded at closing. At the same time, Team King has not yet provided certain requested information to the CNMI government and has yet to fully fund the escrow account.
“Regardless of whether the Commonwealth or Team King (or both) is/are at fault for this delay, their failure has placed the estate in a precarious position,” IPI said in the filing.
Attorney Chuck Choi, representing IPI, stated: “The debtor has no cash. Its hotel security personnel have not been paid since early May. The debtor’s liability insurance recently lapsed. Annual ground rent of approximately $207,000 for the DPL ground lease (which should have been paid in May) is delinquent.”
“In short,” Choi added, “the administrative insolvency hole has gotten deeper. This delay harms all creditors.”
According to IPI, the sale price was already insufficient to fully pay secured creditors and administrative claimants. The creditors’ committee had negotiated down secured claims and subordinated the CNMI government’s unsecured claims to allow some recovery for general unsecured creditors.
“However,” Choi said, “each day of delay in closing threatens the prospects of that meager recovery.”
He said disputes between Team King and the CNMI remain unresolved, and asked the court to order both parties to submit a joint status report — or separate reports, if a joint filing is not possible — indicating what issues remain and what steps each party has taken to comply with the sale order.
