CENTURY Estate Investment Ltd. agreed to extend two loans of $9 million and $10 million to Imperial Pacific International, according to Zhongxiang Xu, Century Estate’s director.
He has filed a declaration in federal court to support Century Estate’s motion to intervene in the lawsuit of Joshua Gray against IPI.
A former director of operations of Imperial Pacific International, Gray prevailed in his discrimination lawsuit against the casino investor.
According to Xu, Century Estate entered into a number of secured transactions with IPI.
“I was the signer of these transaction documents. The Financing Statements…were recorded at the CNMI Recorder’s Office on December 21, 2022, and July 3, 2023. Under the recorded financing statements, Century agreed to extend two loans of $9 million and $10 million respectively to IPI,” he said.
In exchange for the loan, Xu said, IPI agreed to plead various assets to secure the repayment of the loans.
“The exact assets that were pledged as the collaterals under the financing statements are recorded in the…filings,” he added.
Xu said on August 21, 2023, he was informed by IPI that a writ of execution was issued in favor of Joshua Gray who sought to execute the writ against IPI’s vehicles, liquor, crystal dragons, computer hardware, furniture, equipment, casino equipment, and security equipment.
“Since most of the personal properties that were subject to the writ of execution are collaterals pledged in favor of Century Estate in the recorded…filings, on or about August 22, 2023, Century began to consult with legal counsels about its options,” Xu said.
“Due to the remoteness of the CNMI and unfamiliarity with the local legal community,” Xu said, “we were unable to secure the legal services of the Law Office of Matthew T. Gregory, till August 31, 2023.”
Century Estate also engaged the legal services of Patricia Ray to serve as co-counsel in this case on a pro hac vice basis on September 7, 2023.
On September 18, 2023, Gregory and Ray filed the motion to intervene on behalf of Century.
Gray, represented by attorneys Aaron Halegua and Bruce Berline, opposed Century Estate’s motion to intervene, saying that the situation “exhibits many of the “badges of fraud” and is “indicative of a fraudulent conveyance.”
In reply, Century Estate stated: “While post-judgment intervention is generally disfavored, in this case, intervenor had no basis for intervention until the writ was issued and implicating the collateral of intervenor. In this case the prejudice claimed by plaintiff is negligible — the expenses of seeking a receiver. In contrast the prejudice to intervenor would be significant. The intervenor has a $9 million interest in the collateral,” Century Estate attorneys said.
“The public record of this loan and security interest is irrefutable. The debt secured by the loan is bona fide and the security in question was provided in return for money paid to IPI. The security interests are in the record and were filed before the judgment was issued in this case. As a publicly filed document, plaintiff is presumed to have notice of such security interest. Furthermore, intervenor has provided evidence that it did in fact transfer more than the $9 million secured by the security interest. The record before the court shows that this is a bona fide security interest provided to intervenor in return for payments to IPI. The court should also bear in mind that these payments are to satisfy other judgments, legal fees and payroll. Such payments are to the benefit of many parties currently before the court since payments were made to satisfy judgments. In addition, the funds provided by the intervenor allowed IPI to make payroll and therefore comply with US labor laws,” Gregory and Ray added.
“Failure to allow intervention to protect the security interest of intervenor would discourage other parties from providing credit to satisfy judgments and make payroll to the detriment of plaintiff and other litigators,” the lawyers said.
“Intervenor has provided the court with evidence of the debt, the security secured by the debt and proof that IPI did in fact receive a payment in return for the security agreement,” they added.
“There are no factual issues to probe with additional discovery. In the alternative, if this court believes it is necessary, the intervenor would of course comply with any discovery the court so orders. However, the issue of whether or not the security interest is bona fide is an issue for the merits and does not bear any relevance to the intervention. Therefore, this court should grant intervenor’s motion to intervene.”
Zhongxiang Xu was listed as Imperial Pacific International Holdings Ltd.’s board of executive directors, according to IPIH’s 2021 annual report.
