RON Hodges of Saipan Services Inc., the receiver of Fairyland Investment LLC., told the federal court on Monday that no expenses were incurred for lots 019 D 61 and Lot 019 D 83 on Navy Hill in December 2021.
But Hodges said he expects potential expenses in January for marketing, insurance and maintenance among other things.
On Sept. 29, 2021, Chief Judge Ramona V. Manglona of the District Court for the NMI granted the motion of Peace & Order Trading Corp., a contractor, to appoint a receiver for an apartment investor, Fairy Land Investment LLC, to help the plaintiff satisfy a judgement in the amount of $767,697.50.
Fairyland Investment was not present at the hearing and did not file an opposition to the plaintiff’s motion for a receiver.
The judge said given Fairyland’s failure to appear in this action despite being given adequate notice, neither Peace & Order nor the court can fully ascertain Fairyland’s financial standing.
The only asset that Peace & Order is aware of is the leasehold interest that Fairyland currently owns on Lot 019 D 61 and Lot 019 D 83 located on Navy Hill, the judge added.
Peace & Order was hired by Fairyland to remodel and build an apartment building on Navy Hill, Saipan.
Represented by attorney Colin Thompson, Peace and Order sued Fairyland, which is owned by Zhi Qi Shen, for breach of construction contract and unjust enrichment.
According to its lawsuit, Peace & Order stopped work on the project because Fairyland refused to pay the amount owed for work completed under the construction contract.
Peace & Order sought damages of not less than $775,701.98 plus interest, attorney’s fees and a mechanic’s lien.
On April 13, 2021 the federal court issued a default judgement against Fairyland in the principal amount of $767,697.50 plus attorney’s fees and costs, including applicable federal interest rate for post-judgement interest.
On Dec. 12, 2021, Judge Manglona appointed Hodges as federal equity receiver who “shall have all authority, powers, and duties to sell Fairyland Investment, LLC’s leasehold interest in Lot 019 D 61 and Lot 019 D 83.”
The appointment also directed the receiver to market and sell Fairyland Apartment at a public auction.
After the preparation of Fairyland Apartment, the judge said, the receiver “shall use reasonable efforts to market and promote it.”
According to the court, the receiver “shall also contact potential buyers on Saipan that may be interested in Fairyland Apartment. [An] auction shall be held within 30 to 90 days after this order, except that no sale shall be made without notice published once a week in the Saipan Tribune or Marianas Variety for at least four weeks prior to the sale. Fairyland Apartment will have an opening bid not greater than 30% of the fair market value calculated by the Receiver using his professional opinion. Bids are final, subject to court approval. At the conclusion of the auction, the winning bidder shall secure the deposit of $100,000.00 within 72 hours and shall receive from the Receiver a confirmation of the winning bid reflecting the amount of the bid, the property description, the amount of time left on Fairyland’s leasehold and confirmed receipt of required deposit; and after the Court’s approval and receipt of full payment, Receiver shall begin processing the land transfer documents to the winning bidder.”
The receiver will be paid 5% of all sales proceeds “as and when those proceeds of sale are made, plus reimbursement,” the court stated.
“Hodges shall first advance the costs for advertisement of the auctions and any cleaning labor used to improve the overall look of Fairyland Apartment,” the court added.
