CHIEF Judge Ramona V. Manglona of the District Court for the NMI on Wednesday granted USA Fanter Corp.’s motion to appoint limited receivership for Imperial Pacific International LLC.
Judge Manglona appointed Clear Management Ltd. and its team of professionals, acting by and through its principal representative Timothy Shepherd, as the receiver.
“Clear Management shall possess all the powers of a federal equity receiver and is vested with the power and authority provided under Federal Rules of Civil Procedure 66 and 69 as well as Local Rule 63.16 to perform all acts deemed necessary to comply with this order,” the judge said.
She added that Clear Management will have all the authority, powers, and duties to sell casino gaming equipment, and any and all gaming equipment identified during the inspection to fulfill the judgment in the matter.
For their part, IPI and its representatives are ordered by the court to cooperate with the receiver’s efforts to comply with all obligations under the issued order.
Clear Management will be paid 10% of all sales proceeds as and when those process of sale are made, together with reimbursement for some expenses, the judge said.
“When a bid is approved by the receiver, the receiver shall notify the court and provide the information on the bid and request written approval,” the judge added.
“The receiver must give all interested parties at least…10 days’ notice of the time and place of hearings concerning petitions for confirmation of sales of property.
“A hearing shall be held within 14 days of the filing of the receiver’s petition for confirmation of sales of property.
“If the court approves the bid, the balance due shall be paid immediately by cash or electronic cash transfers to Thompson Law LLC Client Trust Account….
“The receiver shall serve until the approval and collection is completed from the sixth and final auction or until the earliest of: (1) The receiver requests to be relieved and such request is approved by the court; (2) Ninety days after the receiver has submitted a notice of resignation to the court; or (3) The court removes and replaces the receiver for good cause and after notice and a hearing pursuant to Local Rule 63.1(g)(5),” the judge said.
As to the other creditors and the distribution of proceeds, Judge Manglona said Local Rule 63.1(g)(1) “contemplates that a petition for the payment of dividends to creditors must be submitted to the court for approval.”
She added, “The receiver must give all interested parties at least 10 days’ notice of the time and place of hearings concerning such petition.”
Her order noted that the court has issued writs of execution against IPI for casino gaming equipment to the plaintiffs in two other matters: Wang, et al. v. IPI, Civ. Case. No. 1:18-cv-00030, and Ping Shun Corp. v. IPI, Civ. Case No. 1:20-cv-00012. Each of these other creditors served a notice of that writ upon IPI via the U.S. Marshals Service on the same day as USA Fanter, the judge said.
“The other creditors may file a motion or submit a stipulation requesting the court amend the order to increase the amount that the receiver will aim to collect from the amount of the judgment to the total amount owed to all three judgment creditors,” the judge said.
She noted that the judgment creditors have “expressed that they are working to agree upon an equitable distribution of those proceeds.”
She said if “an agreement is reached, the judgment creditors shall file a stipulation to be so ordered by the court. If agreement is not reached, any of the judgment creditors may file a motion requesting that the court decide the distribution of any sale proceeds amongst the judgment creditors within 10 days of when the receiver notifies the court that it has concluded all sales of the casino gaming equipment, or at any time prior. The other creditors do not waive any rights by not filing their own motion to sell the casino gaming equipment or by deferring the assertion of any rights until later in this process. In the event that no stipulation or motion is submitted by the other creditors, the net proceeds of the sales will be distributed to USA Fanter.”
Judge Manglona said the court retains specific and continuing jurisdiction to enforce the provisions of its order, and to enter such further orders to effectuate the purposes of federal equity receivership.
The court said it “additionally retains jurisdiction to enable any party, subject to the order, to apply to the court at any time for further orders and directions as may be necessary or appropriate to carry out or construe the order, to modify any of its provisions, to enforce compliance, and to punish violations of its provisions.”
USA Fanter sued IPI for its failure to pay the full amount due to the plaintiff under their construction contract for labor and materials provided for the improvement of IPI’s real property.
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.
The judge has issued a final judgment in favor of USA Fanter.
