ANGEL Playing Cards USA Inc., Imperial Pacific International LLC, USA Fanter Corp. Ltd. and receiver Clear Management Ltd., acting through Timothy Shepherd have agreed to a 30-day stay of sale, according to a stipulation they filed Monday in federal court.
The parties stipulated to stay the sale of any and all Angel products, including but not limited to Super Angel Eye dealing shoes and Angel playing cards, for 30 days, and to continue the hearing on Angel’s motion to preliminarily enjoin or stay the sale of Angel Playing Cards or APC products by the receiver to a date and time convenient to the court and prior to the dissolution of the 30-day stay.
“All parties reserve the right to support or oppose the motion according to a briefing schedule that the court shall set,” the stipulation added.
APC is represented by attorney Richard Miller; IPI by attorney Stephen Nutting; USA Fanter by attorney Colin Thompson; and Clear Management by Timothy Shepherd.
Miller on Friday asked the federal court to preliminary enjoin or stay the sale of its products by the receiver.
Miller said APC has supplied IPI Holdings Ltd. and its affiliates, including IPI, with electronic dealing shoes and playing cards since 2016.
“The Super Angel Eye β or SAE β dealing shoes are sensitive electronic devices coded for each casino that uses them. The Angel playing cards have an invisible bar code that is customized to be acknowledged and read by SAE β shoes provided to Imperial Pacific,” Miller said.
This intellectual property or “IP” is closely guarded by APC, and IPI is contractually obligated not to disclose it to third parties, he added.
“By an express term of the sales agreement and non-disclosure agreement between APC and IPI, the IP remained the sole property of APC, and APC granted IPI only a right to use the products. Because IPI did not acquire the full bundle of rights in the products, the receiver does not have full title to transfer after auction.”
In addition, Miller said, because a January 2020 shipment of 161,280 decks of playing cards has not been fully paid, IPI does not have title to those decks and therefore the receiver cannot sell them.
The sale of its products set for Nov. 30 would irreparably harm APC and run counter to the public interest, Miller added.
New motion
On Friday Judge Ramona V. Manglona of the District Court for the NMI denied, without prejudice, IPI’s request to vacate her receivership decision and terminate the limited receiver.
On Monday, IPI attorney Kevin T. Abikoff again asked the court to reconsider its appointment of the limited receiver and vacate that order.
In a 25-page memorandum, Abikoff reiterated that “IPI is prepared to place the full judgment amount of $2,089,345.28, into a restricted account designated by USA Fanter Corp., Ltd., or this court fully securing U.S.A. Fanter for the duration of IPI’s appeal of the judgment in this case to the Ninth Circuit Court of Appeals.”
In so doing, Abikoff said, IPI asks the court to stay judgment in the case, including the limited receiver in aid of execution entered by the court in an oral ruling on Aug. 12, and further detailed in a memorandum decision entered on Oct. 26.
“The cash fund created by IPI, under this court’s direction, will better secure USA Fanter — providing more cash than would be realized through the sale of the property subject to the receivership — and will also better serve the interests of IPI and its creditors by ensuring that IPI’s assets are not sold in the midst of economic conditions that, contrary to USA Fanter and the receiver’s representations, continue to create challenges for the casino gaming industry, including the continued effects of the global pandemic (and the possibility of a newly discovered, highly contagious variant) and widespread delays in global shipping and skyrocketing shipping rates. Sale of the gaming equipment at this time (especially after the receiver’s 10% fee is deducted) would generate significantly less revenue to satisfy USA Fanter’s judgment than IPI’s proposal to place $2,089,345.28 in a court-designated account.”
Abikoff said, “Every single reason on which the court based its order appointing a limited receiver in aid of execution is no longer viable.”
He added, “IPI has funds available to satisfy USA Fanter’s judgment and is willing to secure those funds in a restricted bank account, and USA Fanter and the receiver admit that many of the reasons they used to justify the appointment of a receiver — including the degrading value of the casino gaming machines and the potential need for extensive repairs — were false or incorrect.”
The court should reconsider its order granting the limited receivership, granting IPI relief from the order and dissolving the receivership pursuant to Rule 60(b) of the Federal Rules of Civil Procedure, Abikoff added.
The plaintiff, USA Fanter Corp. Ltd., sued IPI for failing to pay the full contract amount due for labor and materials it provided for the improvement of IPI’s real property in Garapan.
The lawsuit stated that IPI had paid USA Fanter $300,000 only and the unpaid balance due was not less than $2,089,345.28.
On May 4, 2021, Judge Manglona issued an order directing entry of an “Amended Final Judgment re: Mechanic’s Lien.”
After IPI appealed to the U.S. Court of Appeals for the Ninth Circuit, USA Fanter applied for a writ of execution on the judgment, and filed a motion for limited appointment of receiver in aid of execution, which the court granted on Oct. 26, 2021.
USA Fanter, in a separate motion, also requested the federal court to issue an order foreclosing its mechanic’s lien against IPI.
A mechanic’s lien is a “hold” against property filed by an unpaid contractor. If unpaid, it allows a foreclosure action, forcing the sale of the property in lieu of compensation, an online legal dictionary stated.
Monday hearing
On Monday, Judge Manglona granted the stipulation to stay the sale of Angel products for 30 days, and scheduled a hearing to address Angel’s motion to preliminarily enjoin or stay the sale of Angel products for Dec. 29 at 8:30 a.m.
As to IPI’s motion to stay judgment pending appeal and motion for relief, the judge granted a stay for two weeks or up to Dec. 15.
She said she will issue an order modifying the limited receivership and to reflect the postponement of the sale of IPI’s property to Dec. 31.
The judge gave the parties up to Dec. 8 to work out a stipulation and details regarding security interest.
