AFTER determining that Ron Hodges, the court-appointed receiver of Fairyland LLC’s leasehold interest in Lot 019 D 61 and Lot 019 D 83 on Navy Hill, Saipan, has complied with statutory notice requirements as well the court’s Local Rule 63.1 and the terms of the receivership, the federal court on Friday approved the sale of the property.
Given that there’s no opposition from either party, Chief Judge Ramona V. Manglona of the District Court approved the sale in the amount of $1.02 million.
Hodges previously filed a sealed receiver’s sale report in court and requested written approval of the auction sale that occurred on Feb. 15, 2022.
The winning bidder was Peace & Order Trading Corporation, which is also the plaintiff in its lawsuit against Fairyland.
Judge Manglona ordered the receiver to provide notice to Peace & Order Trading Corp. within seven business days of the approval of the sale, and the winning bidder must submit the balance within 10 business days of notification.
She said the balance due shall be paid to the Thompson Law Client Trust Account, as agreed upon by the parties and the receiver at the hearing, to serve as the escrow account.
Upon receipt of the funds in the Thompson Law Client Trust Account, counsel for Peace & Order shall submit the document transferring title (assignment of lease) to Fairyland’s counsel for his review and approval.
Once approved by both parties, the assignment of lease will be executed by the receiver and recorded with the Commonwealth Recorder’s Office.
“After Peace & Order receives the document transferring Fairyland’s leasehold interest to it and the document is publicly recorded, the proceeds from the auction sale in the amount of $1,020,000 may be distributed from the Thompson Law Client Trust Account,” Judge Manglona added.
The judge also directed the parties to show how the proceeds will be distributed.
The receiver will receive $51,000 plus $787.10 for expenses incurred.
Plaintiff’s amended judgment is in the amount of $797,673.56.
The remaining $170,539.34 will go to Fairyland.
Judge Manglona also ordered the receiver to file a closing report no later than March 11, 2022, “detailing total proceeds received, cost of sale that includes the receiver’s commission of 5%, and net proceeds collected for payment of the judgment.”
Fairyland was represented by Dotts Law Office.
On April 13, 2021, a default judgment was entered in favor of the plaintiff, Peace & Order Trading Corporation, against Fairyland in the principal amount of $767,697.50, plus attorney’s fees and costs, and post-judgment interest at the applicable federal interest rate.
Fairyland hired Peace & Order to remodel and build an apartment building on Navy Hill, Saipan.
Peace & Order later sued Fairyland for breach of construction contract and unjust enrichment.
On Sept. 29, 2021, the federal court granted Peace & Order’s second motion for the appointment of a receiver, and appointed Ron Hodges as the receiver.
The court subsequently issued an order setting out the terms of the receivership for the auction of Fairyland’s leasehold interest in Lot 019 D 61 and Lot 019 D 83 located on Navy Hill, Saipan.
