District Court for the NMI Chief Judge Ramona V. Manglona issued a separate order restricting the security provided as an alternative to a bond and staying enforcement of the judgment pending appeal.
A stipulation from Pacific Rim and IPI indicated that the IPI investor deposited security in an investment portfolio consisting of short-term U.S. government bonds with Merrill Lynch, Pierce, Fenner & Smith Inc., First Hawaiian Bank Bldg., 400 Route 8, Suite 403, Guam.
Earlier, the judge granted a conditional approval of the IPI motion to approve the deposit and motion to stay and ordered the parties to stipulate restrictions.
Pacific Rim had asked the court for an order for turnover, assignment, and judicial sale of IPI gaming machines and heavy equipment and vehicles; and to seize money in IPI cage for the purpose of reducing the previous judgment amount entered against IPI.
But the judge denied Pacific Rim’s motion and granted IPI’s motion for a stay.
In her order establishing security pending appeal, Judge Manglona said Pacific International Property Management LLC or PIPM had resolved to place $5,525,363.98 “within the absolute discretion of this court for the purpose of securing a stay and paying on the judgment in the event that Pacific Rim prevails in the appeal.”
The court noted that PIPM has increased the amount to be deposited to $5,599,975 to cover post-judgment fees, costs and interest.
According to the stipulation filed by Pacific Rim and IPI in court, PIPM is not owned by IPI and PIPM does not own IPI. PIPM is a separate and independent business entity from IPI. PIPM agreed to pledge its own funds in the amount of $5,599,975.00 as security under FRCP Rule 62 as an alternative to a bond.
The fund “shall be available in full to satisfy the judgment, including fees, costs, interest, and damages for delay that may be awarded, if the appeal should be dismissed or the judgment affirmed,” Judge Manglona said in the order.
Moreover, the fund “shall be available in full to satisfy any modification of the judgment ordered by the District Court, appellate court, or, if the judgment should be affirmed only in part, to satisfy that part of the judgment affirmed, including fees, costs, interest and damages for delay that may be awarded.”
The judge added that the fund will also be available in full for return to PIPM only if IPI prevails on the appeal.
Once the appeal is concluded, “the parties shall return to the [District] Court for an order directing how the fund will be released or transferred.”
The fund “shall not be released or transferred absent order of the court,” Judge Manglona wrote.
A copy of the order will also be provided to Merrill Lynch, she added.
The federal court will determine the prevailing party on the appeal.
“In the event that the court determines that Pacific Rim prevailed on appeal, the court shall direct the fund to be released to Pacific Rim,” the judge said.
Likewise, in the event that the court determines that IPI prevailed on the appeal, “the court shall order the fund to be released to PIPM.”
Judge Manglona said in the event that it is not clear who the prevailing party is on the appeal, “the court shall enter such orders as will achieve justice.”
Judge Manglona also directed Pacific Rim to take no action to execute or enforce judgment. “This includes, without limitation, the filing of a writ of execution to remove funds from any bank accounts of IPI and the forced sale of assets of IPI through an auction.”
IPI, through attorney Michael Dotts, has opposed Pacific Rim’s request for an order authorizing it to auction IPI gaming machines and vehicles to satisfy judgement.
IPI instead asked the court “to enter an order restricting the bank account designated to secure Pacific Rim or to designate a different account as deemed reasonable for the funds to be transferred to and to be restricted by the court to secure Pacific Rim.”
Dotts said IPI has appealed the judgment and should IPI prevail on the appeal, the funds can be released back to the investor.
Pacific Rim, represented by attorney Colin Thompson, sued IPI for breach of contract for refusing to pay for services in the amount of $5.65 million for the substantially completed or completed agreed-upon construction work for IPI’s casino-resort project on Sept. 30, 2018.
On April 27, 2020, Judge Manglona entered a judgment in favor of Pacific Rim in its lawsuit against IPI for breach of contract and breach of promissory note.
On May 2, 2020, the federal court entered an amended civil judgment in favor of Pacific Rim in the amount of $6.8 million including the principal amount and attorney’s fees and costs.
On June 22, 2020, Pacific Rim filed a motion for order in aid of judgment. On the same day, the court issued an order granting in part and denying in part Pacific Rim’s motion. The judge directed the clerk of court to release the IPI funds in the amount of $1,383,869.45 received from Bank of Saipan to Pacific Rim.
On July 23, 2020, the court issued an order authorizing the release of funds to the plaintiff in the amount of $100.
According to Pacific Rim the unpaid balance due on the judgment is not less than $5,525,363.98.
