SUPERIOR Court Associate Judge Juan T. Lizama heard yesterday a law firm’s motion to disqualify Presiding Judge Edward Manibusan from conducting the Bank of Saipan receivership proceedings.
After listening to the arguments of all parties, Lizama placed the issue under advisement. He said the court will issue a written order.
Attorney Rodney Jacob of Calvo & Clark law firm, on behalf of Bank of Saipan, Inc., underscored the need to disqualify Manibusan, saying that under the extraordinary circumstances of the case, the presiding judge’s impartiality “might reasonably be questioned.”
Jacob raised the concerns of his clients with respect to the ex parte “private briefing” of Manibusan by Bank of Saipan temporary receiver Randall T. Fennell despite their written objections. He also raised the issue about the receiver’s sealed reports.
Jacob said under the circumstances, a closed-door ex parte meeting between Manibusan and Fennell would be highly improper.
Assistant Attorney General Allan Dollison, counsel for Commerce Secretary Fermin M. Atalig, said Manibusan has been impartial and fair.
Dollison said the liquidation of the bank was only one of the options considered by Atalig and the receiver.
Prior to the receivership, Dollison said, the bank’s board of directors was pursuing liquidation.
“They want a receiver that they can control. They received $3.5 million from the crooks. The receiver wanted to get back this $3.5 million,” Dollison said.
Attorney General Robert Torres said “nothing happened” after Fennell briefed Manibusan.
Torres said Fennell was appointed as temporary receiver for 30 days because he served as receiver for the now defunct Commonwealth Bank. He said the court found him the most qualified.
Robert O’Connor, counsel for the bank’s major shareholders, the Calvos, said the receiver’s duty is also to protect his clients and not only the depositors.
O’Connor said his clients are the owners of the bank and they should not be excluded from those meetings or denied of their fundamental due process.
The Calvos appeared in court to “try to give the court guidance on what are the limits of ex parte context that should be allowed between the receiver and the judge.”
In response to Dollison’s statement about the sale to “crooks,” O’Connor said the sale never went through or it was never completed.
O’Connor said the government approved the sale when it was its responsibility to investigate the buyers.
In an interview, O’Connor said it was the Calvos who discovered the “problem” with the prospective purchasers.
“We called the FBI and the U.S Attorney’s Office and stopped the sale. But we found out before the sale went through that the (government) two to three weeks before that…had already approved the sale,” he said.
“The banking commissioner has the responsibility to do due diligence and he failed. We have the responsibility to do due diligence and we ultimately succeeded because we discovered that these people were not responsible,” he said.
Atalig, as commerce secretary, is also the banking commissioner.
O’Connor, in an interview, said there is a need to work toward rehabilitating the bank.
O’Connor said the Calvos feel very confident that the bank can be saved.
“What we need is the receiver, shareholders, the directors and the government agencies involved to all get together, come up with a rehabilitation plan so that the bank can be saved,” he said.
Torres told reporters that they were hoping Lizama would issue a written decision quickly so that they could get back on track and deal with the other motions.
“In the meantime, the bank continues to be open and continues to receive deposits pursuant to the court’s order,” Torres said.
“We’ll continue to work…toward rehabilitation of the bank and making sure that the interest of the depositors and the people who have money in there are protected,” he said.
On O’Connor’s statement about the commissioner, Torres said the fact that the banking commissioner approved the sale, “does not diminish the Bank of Saipan directors’ responsibility.”
