IMPERIAL Pacific International LLC is opposed to lifting the stay on the sale of its casino property in the lawsuit of seven construction workers who sued IPI over allegations of labor violations and human trafficking.
IPI, through attorney Kevin Abikoff, said the “liens” against casino gaming equipment are restricted in the CNMI.
“The property that is subject to the limited receivership is regulated by the Commonwealth Casino Commission,” Abikoff added.
Further, the lawyer said, the plaintiffs did not comply with CNMI law and the receivership must therefore be dissolved.
According to Abikoff, “CNMI law states clearly that no person may obtain a ‘lien’ or security interest over equipment regulated by the CCC unless they first obtain permission and a license from the CCC.”
The “plaintiffs did not take these steps,” he added. “Instead, they improperly sought and obtained a writ of execution against IPI’s regulated casino gaming equipment. Now, they seek to reinstate a Limited Receivership, established by this court in another matter based on a similarly deficient writ of execution, to sell IPI’s casino gaming equipment.”
Abikoff reiterated that the plaintiffs “have no valid interest in this property — under CNMI law they cannot hold a lien or security interest in this property without CCC permission and licensure and by extension the receivership sought to force the sale of the equipment should be dissolved.”
Despite this clear dictate, and in violation of CNMI law, he said the plaintiffs sought and obtained a writ of execution against IPI’s casino gaming machines.
Nowhere in the record did the plaintiffs indicate that they had sought permission or a license from the CCC, Abikoff added.
The “plaintiffs then compounded this violation by moving to ‘step into the shoes’ of a limited receivership established — also without the required permission or license — in another matter, U.S.A. Fanter Corp., Ltd. v. Imperial Pacific International (CNMI), LLC, Case No. 1:20-cv-00003, to liquidate the casino gaming machines,” Abikoff said.
Because neither the plaintiffs nor the plaintiff in USA Fanter “followed the requirements of CNMI law in obtaining their liens against IPI’s casino gaming machines — liens which explicitly formed the basis for the establishment of the Limited Receivership — those liens are invalid, and the Limited Receivership over IPI’s casino gaming machines must be dissolved.”
Represented by attorneys Aaron Halegua and Bruce Berline, the plaintiffs are Tianming Wang, Dong Han, Yongjun Meng, Liangcai Sun, Youli Wang, Qingchun Xu, and Duxin Yan.
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 has filed an appeal to the U.S. Court of Appeals for the Ninth Circuit.
Early this year, the parties executed an agreement to stay enforcement with an effective date of Feb. 3, 2022. The plaintiffs agreed to stay enforcement of their default judgment in exchange for IPI and certain other parties securing an appeal bond in the amount of $6 million on or before June 30, 2022, committing other collateral, and fulfilling other obligations set forth in the stay agreement.
In a recent order, however, Chief Judge Ramona V. Manglona of the District Court for the NMI said IPI had failed to comply with its obligation when it did not make a required payment last month.
The judge then ordered American Contractors Indemnity Company to release to plaintiffs the $3 million secured by the supersedeas or appeal bond.
As for the plaintiffs’ request that the stay on the limited receivership for IPI’s casino gaming equipment be lifted, Judge Manglona said further briefing is necessary on the issue.
The judge directed IPI to file its brief in opposition to the lifting of the stay on the limited receivership no later than June 2, while the plaintiffs were given until June 7, to file their response.
The judge also scheduled a hearing for June 9.
As for the receivership, it will remain on hold until June 15.
