CHIEF Judge Ramona V. Manglona of the District Court for the NMI on Friday granted the request of the U.S. Department of Labor to appoint Guam attorney Joyce Tang as receiver of Imperial Pacific International LLC.
At the same hearing, the CNMI government acknowledged that its tax lien claim on IPI is “subordinate” to the U.S. Department of Labor’s consent judgment claim.
Judge Manglona, for her part, granted USDOL’s request to allow the parties to pursue a possible settlement in paying the balance of the consent judgment.
The judge said a self-executing receivership will take effect on March 12 at 1:30 p.m. should IPI fail to pay the remaining balance at that time.
Attorney Charles Song of the USDOL informed the court that the department had received a payment of $250,000 from IPI.
According to Song, IPI told the USDOL that the casino investor would wire the remaining balance of the consent judgement in the amount of $1,182,793.
“As of now, we cannot confirm receipt of [that] payment…maybe it is just bureaucracy on our part,” Song told the court via Zoom.
He said he was also in communication with IPI attorney Michael Dotts regarding the remaining payroll amount owed to IPI employees, which was approximately $800,000.
Pleased
Judge Manglona said she was pleased with these developments and the ongoing negotiations that were taking place.
“If…IPI…honors its contracts and [pays] the workers’ wages, they might be allowed to resume operations. I’m pretty sure that is the end goal,” she added.
Tang, who is also the trustee of the CNMI Settlement Fund, told the court that she may not need additional legal assistance, but her appointment order should include the hiring of an appraiser.
For example, she said the two crystal dragons at the IPI casino resort, “[based on the] articles that I’ve read, are quite valuable, but lawyers are not competent on that. I think we need to bring in someone from Sotheby’s and Christie’s,” referring to the world’s two major international auction houses.
Settlement
Dotts noted that the receivership does not take effect until March 12, so “if we reach a settlement agreement with USDOL, then it will not take effect.”
Judge Manglona nonetheless instructed Tang to do an initial accounting of IPI’s total arrears to include fees and costs.
Also present at the hearing were IPI chairwoman Cui Li Jie’s attorney, Juan T. Lizama, IPI chief executive officer Ray N. Yumul and IPI vice president for public affairs Tao Xing.
The CNMI Department of Finance-Division of Revenue and Taxation was represented by Assistant Attorney General Dustin Rollins.
Saying that IPI owes a total of $10.4 million in unpaid taxes, the CNMI has submitted three notices of tax lien against all the properties and rights to property of IPI in the consent judgment proceedings in federal court.
But at the hearing on Friday, Rollins told Judge Manglona that the Commonwealth’s tax lien claim is subordinate to the USDOL’s claim.
In a previous notice of tax lien filed against IPI, the CNMI government stated that its tax lien “has priority over any lien or encumbrance not perfected prior to the Commonwealth recording its tax lien notices.”
Judge Manglona has found IPI, IPI Holdings Ltd., and IPI chairwoman Cui Li Jie in contempt of court for violating the consent judgment with the USDOL, and for not paying IPI’s current employees for over two months.
Last week, IPI informed the court that it would not be able to pay the consent judgment, prompting the USDOL to nominate Joyce Tang as receiver for IPI.
