THE federal court has granted the stipulation of court-appointed receiver Clear Management Group and Angel Playing Cards U.S.A. Inc. for APC to repurchase all 201 Super Angel Eye dealing shoes in the custody and control of Clear Management at the unit price of $1,500 for a total of $301,500; and to repurchase all decks of Angel playing cards in Clear Management’s possession at the unit price of $0.10 per deck.
Clear Management is Imperial Pacific International LLC’s receiver.
Chief Judge Ramona V. Manglona of the District Court for the NMI on Tuesday approved and confirmed the sale.
She said, “The sale would be no more than what was purchased at 1.9 million at ten cents a deck.”
Without objections from the parties, Judge Manglona also granted the request of attorney Michael White, who represents Clear Management, to have the funds transferred held in an escrow trust account.
According to the stipulation of the parties, APC previously sold a series of products to IPI, including dealing shoes and playing cards.
On Oct. 26, 2021, the federal court appointed Clear Management as limited receiver to take possession of and sell at auction IPI’s casino gaming equipment.
The casino property subject to sale by Clear Management included 201 units of Super Angel Eye automatic dealing shoes.
In a motion opposing the auction of APC products, APC said IPI acquired only the right to use Angel products and that, therefore, Clear Management cannot transfer title to APC products to purchasers at auction.
At a hearing on Nov. 29, 2021, the court stayed the auction of APC products for 30 days.
On Dec. 17, 2021, the court issued the first of a series of orders staying the receivership.
On April 14, 2022, the court denied APC’s motion without prejudice and with the understanding that if the stay was ever lifted, APC could refile the motion.
On Aug. 16, 2022, the court lifted the stay on the limited receivership.
Since the lifting of the stay, APC and Clear Management negotiated for APC to repurchase the 201 dealing shoes at the unit price of $1,500 for a total of $301,500. The market price for purchasing new Super Angel Eye dealing shoes is $4,200 per unit.
It is the opinion of Clear Management that the market for the pre-owned dealing shoes is extremely limited, given their age and the adverse storage conditions to which the shoes have been exposed. No bids were received on the shoes before the initial auction was stayed.
Clear Management and APC agreed that the proposed repurchase price for the dealing shoes is reasonable and represents the maximum value that could be obtained for the pre-owned dealing shoes in the present market.
In 2016, IPI and APC entered into an agreement for IPI to purchase a total of 1,935,360 decks of playing cards over a period of time. The final purchase and shipment of decks occurred in January 2020. Clear Management has yet to determine the number of decks in inventory.
Because playing cards have a limited lifespan and are routinely destroyed or canceled when a casino takes them out of use, the inventory of decks is believed to be substantially less than 1.9 million.
APC and Clear Management have agreed that APC may repurchase any decks that are located at a price of $0.10 per deck.
It is the opinion of Clear Management that the market for pre-owned playing cards is almost nonexistent, as they cannot be used in a casino and can only be used, if anything, for training purposes.
Clear Management and APC agreed that the proposed repurchase price for the card decks is reasonable and represents more than the maximum value that could be obtained for them in the present market.
The stipulation added that the proposed sale of dealing shoes and card decks avoids delay and litigation costs if APC were to refile its motion to enjoin the auctioning of its products, and mitigates the risk that fewer than all units would sell at the initial auction.
The parties agreed that the proposed sale to APC is in the best interest of IPI’s creditors and maximizes the value that can be obtained through the sale of the dealing shoes.
Attorney Richard Miller represents APC.
Represented by attorney Aaron Halegua, the seven construction workers who sued IPI over labor violations and human trafficking allegations are also parties to the stipulation.
Previously, the federal court granted the request of the seven workers to lift the stay on the sale of IPI’s casino gaming machines to satisfy judgment pursuant to the receivership established in U.S.A. Fanter Corporation v. Imperial Pacific International (CNMI), LLC, Case No. 1:20-cv-00003.
The construction workers were previously employed by IPI’s former contractor and subcontractor, MCC International and Gold Mantis, both of which have already settled with the workers.
On May 26, 2021, the federal court entered a default judgment in favor of the workers plus post-judgment interest and attorneys’ fees for a total amount of $5.9 million.
IPI failed to pay the judgment, resulting in the federal court’s granting of the plaintiffs’ application for a writ of execution for the seizure of IPI’s personal property, including its casino gaming machines.
On March 16, 2022, Judge Manglona granted a stipulation filed in the Fanter case between the plaintiffs and IPI that stayed enforcement of the writ.
Under the stay agreement, the court amended the receivership in the Fanter case to add the seven workers as additional creditors with the right to step into the shoes of Fanter to enforce the judgment owed to the plaintiffs.
In that stay agreement, IPI recognized that in the event it failed to comply with the stay agreement, the plaintiffs would have the right to proceed with enforcement via receivership.
On May 27, 2022, Judge Manglona found that IPI had defaulted on the agreement.
The seven construction workers — Tianming Wang, Dong Han, Yongjun Meng, Liangcai Sun, Youli Wang, Qingchun Xu and Duxin Yan — requested the court to lift the stay on the limited receivership to sell IPI’s casino gaming equipment so that the judgment can be satisfied.
USA Fanter, for its part, 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 the Saipan casino investor’s real property in Garapan.
According to that lawsuit, IPI had paid USA Fanter $300,000 only and the unpaid balance due was not less than $2,089,345.28.
Judge Manglona has issued a final judgment in favor of USA Fanter.
