ATTORNEY Randall T. Fennell, the court appointed receiver for Bank of Saipan, has developed a plan that will allow the bank to re-open on a limited basis.
The bank’s management, however, has asked the Superior Court to replace Fennell as receiver due to his alleged lack of impartiality.
The bank, through attorney Michael A. Pangelinan, said Fennell had already begun to act outside the scope of his authority “to the detriment of the bank and its shareholders and depositors.”
Pangelinan said the receiver failed to take action against the perpetrators of the fraud on the bank notwithstanding the board’s request that these claims should be pursued immediately.
“Rather than pursuing the perpetrators…the receiver has made veiled threats against some of the owners and largest depositors of the bank,” Pangelinan alleged.
On Friday, Superior Court Presiding Judge Edward Manibusan issued an order that clarified Fennell’s duties and approved the receiver’s May 8 report. The judge said the court will hold a hearing on May 29 regarding the receivership.
Fennell, in his May 8 report, said upon review of the bank’s financial records and interviews with its management and independent auditor, he found that the bank, “although illiquid, is not insolvent.”
Under Fennell’s proposed re-opening plan, 10 percent of the principal value of a time certificate of deposit savings account plus interest may be withdrawn at maturity, while the balance will be renewed for a like term at the prevailing market rates. He said payment will be made through the bank cashier’s check.
But selected account holders, primarily accounts belonging to the CNMI government and its agencies, those that belong to former and existing bank directors and certain major shareholders will remain 100 percent frozen during the interim period pending the conclusion of the investigation into the potential liability of the bank’s directors and certain current and former shareholders, Fennell said.
Fennell said he may rehabilitate the bank and reopen it; may sell it or its operational assets and liabilities to a third party; or may liquidate the bank.
Fennell said the last option he is pursuing is the liquidation of the bank. This involves the marshaling of all the bank’s assets, including the collection of loans and overdrafts, the initiation of litigation with a view to recovering funds and damages, and the potential piecemeal sale of the bank’s assets.
