IMPERIAL Pacific International LLC has filed a notice of opposition to the proposal made by Clear Management to expand the scope of the receivership to include all the casino developer’s property.
IPI, represented by attorney Samuel Salyer, asked the District Court for the NMI to further brief the parties on the topic in a scheduled hearing.
On Oct. 26, 2021, Chief Judge Ramona V. Manglona appointed Clear Management as receiver for the purpose of selling IPI’s gaming equipment to satisfy a judgment awarded to USA Fanter Corporation Ltd.
USA Fanter sued IPI for its failure to pay the full amount due to the plaintiff under their construction contract for labor and materials provided for the improvement of IPI’s real property in Garapan.
The lawsuit stated that IPI had paid USA Fanter $300,000 only and the unpaid balance due was not less than $2.08 million.
The judge has issued a final judgment in favor of USA Fanter.
According to Salyer, “The court should refrain from expanding the scope of the receivership at this time.”
He said the report filed by the receiver “identifies a total of five creditors with judgments against IPI: 1) The Law Office of Michael W. Dotts, LLC has a judgment against IPI in CNMI Superior Court of $444,846.88; 2) Kan Pacific Saipan, Ltd. has a judgment against IPI in the U.S. District Court of $697,801.30; 3) G4S Security Services (CNMI), Inc. has a judgment against IPI in CNMI Superior Court of approximately $12,100; 4) Atkins Kroll (Saipan) Inc. has a judgment against IPI in CNMI Superior Court of approximately $81,100; and 5) Ecolab (Guam) LLC has a judgment against IPI in CNMI Superior Court of approximately $18,300.
The total amount of IPI’s current judgment creditors is approximately $1.25 million, Salyer said.
He said the sales of IPI gaming equipment that have taken place thus far have resulted in $1.06 million being made available for payment to IPI’s judgment creditors — minus any claims by the receiver for expenses incurred since March 31, 2023.
A significant amount of gaming equipment remains to be sold, with the fifth auction scheduled to close on June 9, 2023, he added.
“The receiver’s report did not provide information regarding the amount of gaming equipment remaining to be sold or the likely value of that equipment. Simply put, it appears very likely that the proceeds from the sale of the gaming equipment that is already subject to the receivership will be sufficient to fully satisfy all current judgment creditors. The receiver’s report identifies a number of other parties with claims against IPI that have not been reduced to judgment; many of these claims are contested, some have apparently not been filed and may be barred by the statute of limitations or other statutory defenses, and other claims included in the receiver’s report have previously been dismissed by this court. The record also demonstrates that IPI is continuing to make efforts to settle or otherwise resolve claims against it,” Salyer said.
He said the court previously analyzed the purpose and scope of the receivership in its decision denying IPI’s stipulated motion to stay limited receivership.
“Both explicitly and implicitly, the court based its decision denying IPI’s motion on the interests of judgment creditors that might seek to join the receivership to satisfy their judgments against IPI,” Salyer said.
He added that the court “expressly held that it would not stay the receivership on the eve before the first auction is to take place when there are still outstanding judgment creditors against IPI, and identified specific creditors with judgments rendered by federal and Commonwealth courts against IPI.”
Similarly, he said, “the court should not now expand the scope of the receivership when there are no identified judgment creditors whose judgments appear unlikely to be fulfilled through the sale of the gaming equipment that is already subject to the receivership.”
“Based on the status of certain other claims,” he added, “it appears quite possible that additional claimants will have their actions against IPI reduced to judgment. Depending on the amounts of these judgments and the amounts raised through upcoming sales of gaming equipment, it may be that an expansion of the receivership will be warranted at that time. That decision, however, should be made once the facts regarding the actual judgment amounts owed to these potential judgment creditors are certain. Expanding the receivership beyond what is required to satisfy the actual judgements against IPI would cut against the cautious approach to equitable receiverships that the Ninth Circuit has endorsed,” Salyer said.
