Forson Holdings sued for nonpayment of rent

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A HOLLOW-BLOCK manufacturing and commercial space rental company has filed a complaint against Forson Holdings (CNMI) LLC in federal court for non-payment of rent.

Unicorn Corporation, through attorney Charity Hodson, sued Forson Holdings, believed to be an Imperial Pacific International, LLC sister company, for breach of contract in the District Court for the NMI.

Cai Lingli, a former IPI board member, is the authorized representative of Forson Holdings.

The lawsuit requests the court to issue an order immediately evicting Forson Holdings and all construction materials and persons from the plaintiff’s real estate property.

Unicorn Corp. also asked the court to award it $675,000  in unpaid rent.

Moreover, Unicorn Corp. wants the court to issue an award of double rent for the period of time that Forson Holdings has stayed on the property without paying rent beginning on October 5, 2018.

In addition, Unicorn Corp. is  seeking an award of general damages in the amount of $783,923 for the cost to repair the property including pre-judgement interest, and post-judgement interest at 9% per year.

According to the lawsuit, Gab Du C. Chong holds a long-term leasehold interest in Lot 030 B 21 in Tanapag, a property that contains an area of 20,156 square meters.

Chong owns 50% of Unicorn Corp.

Hodson said the property contains a 50,000-square-foot warehouse; four 5,000-square-foot barracks; a 50,000-square-foot factory; and two two-story (six units each) apartment complexes.

On February 26, 2016, Mrs. Chong subleased the property to Forson Holdings for a term of two years.

Cai Lingli, Forson Holdings authorized representative, signed the sublease.

Hodson said the sublease contained an option to extend in four-year increments for a total of term of six years.

Forson Holdings took possession of the property on Feb. 27, 2016, Hodson said, adding that “the sublessor waived the rent for the first six months, with the monthly rent to become payable starting in the seventh month of the term of the sublease at the rate of $25,000 due on the first day of each month.”

The sublease required a $150,000 deposit within the seven days’ execution of the sublease. The deposit would be applied to the last six months of the term of the sublease.

“Forson Holdings promised to repair existing damage to the property in exchange for a six-month rental waiver (as that was about the negotiated cost estimate of repairing existing damage previously caused by Typhoon Soudelor),” Hodson said.

She added that the reason for the waiver was not included in the sublease which, she said, was drafted by Forson Holdings’ attorney.

“Mrs. Chong was not represented by counsel during the negotiations or the execution of the sublease,”  Hodson said.

She said Mrs. Chong’s daughter wanted Forson Holdings’ attorney to add protective language to the sublease.

But Forson Holdings attorney insisted on keeping the sublease “simple” and when the daughter asked questions about the sublease, Forson Holdings’ attorney questioned the sincerity of the negotiations, Hodson said.

Forson Holdings paid $450,000 due under the sublease for the two-year term, she added.

“Other than the first deposit, which was a cashier’s check, all other rental payments were made by checks from IPI,” Hodson said.

The sublease expired on Feb. 27, 2018.

The lawsuit stated that on March 31, 2018 Forson Holdings ceased using the property for manufacturing and lodgings for employees believed to be of IPI, but continued to use the property as storage for heavy equipment, generators, and storage for lodging facilities.

Hodson said Forson Holdings has neither completed the promised repair work nor reimbursed Unicorn Corp. for the six-month waiver of rent, which was premised on the promised repair work.

She added that during the term of  tenancy and holdover tenancy, Forson Holdings has caused structural damage to the property, such as demolishing several walls to create a massive entrance for heavy equipment to enter the property.

Forson Holdings also deluged an underground 30,000-gallon water tank on the property with manufactured materials including but not limited to steel, metal, and trash, the lawyer said.

She said during the term of its tenancy and holdover tenancy, Forson Holdings also caused other major damage to the property, including ripping off all of the previously existing floor tiling to the bare concrete (presumably to accommodate heavy trucks driving over the floor), cutting all electrical wiring that existed prior to the sublease, and damaging the majority of the windows.

Hodson said Forson Holdings did not exercise its option to extend the sublease, but since Feb. 27, 2018 to date, Forson Holdings has occupied the property and has not paid any rent for its holdover tenancy.

To date, she said, Forson Holdings continues to store heavy equipment, generators, and lodging and house furnishing on the property.

On April 25, 2018, Mrs. Chong’s then-attorney delivered a letter to Forson Holdings, advising Forson Holdings of its holdover tenancy and outlining damages.

But Forson Holdings did not respond to the April 25, 2018 letter and instead sought to negotiate directly with Mrs. Chong without the assistance of her attorney in an effort to obtain a new sublease in the name of another entity, Hodson said. But these negotiations were unfruitful and no sublease was created, she added.

Hodson said other notices sent to Forson Holdings regarding breach of the sublease, and due rent went unanswered.





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