BANK of Saipan’s major shareholders have filed a lawsuit against Commerce Secretary and Banking Commissioner Fermin M. Atalig for his decision to have the bank remain in receivership.
Bank of Saipan, Inc., through the Calvo & Clark law firm, asked the Superior Court to issue a temporary, preliminary, and permanent injunction compelling Atalig to discontinue the receivership.
Attorney Rodney J. Jacob of Calvo & Clark requested the court to make a ruling confirming that Atalig’s decision “is not supported by facts, is arbitrary and capricious, contrary to due process and law and should be reversed.”
Jacob, in the petition for judicial review, said Atalig in his May 28 decision issued determinations in support of his belief that the bank was not in sound financial condition to continue business and that the bank’s affairs were being conducted in such a manner that the public and or depositors were in danger of being defrauded.
But according to Jacob, the respondent’s determination to continue the receivership and the basis for such a continuation should be reversed for the following reasons:
• The determination is based upon unlawful procedure and abuse of process.
• The determination is not supported by the evidence in the record.
• There are no regulations or law supporting the determination.
Jacob claimed that the government misrepresented its nominee as receiver and attorney Randall Fennell was appointed temporary receiver.
“The government knew or should have known that Fennell was and is so conflicted that he was not competent or qualified to serve as receiver,” he said.
Jacob said that in violation of the bank’s rights, Fennell, his counsel and the government proceeded by filing a complaint in the receivership case without ever serving his client.
Jacob said Fennell, his counsel, and the government engaged in “extreme and unlawful conduct to deny petitioner due process in the receivership case.”
“The bank should have been given a meaningful opportunity to be heard with regard to the secretary’s findings its financial condition,” Jacob said.
Such a hearing, Jacob continued, is necessary especially considering the serious allegations being made by Atalig that the bank engaged in unsound business practices and that the depositors have been defrauded.
“The restriction on withdrawal of deposits from the bank, the appointment of a receiver to take possession of the bank and to carry out its business and the decision to continue such receivership are actions which warrant a timely and meaningful pre-deprivation administrative hearing,” Jacob added.
