SAYING that Loi Lam Sit has demonstrated his financial ability to proceed with the purchase of all the casino developer’s assets, Imperial Pacific International and the committee of unsecured creditors have requested the federal court to approve his designation as the stalking horse bidder.
A stalking horse bidder is an “initial bidder chosen by the debtor (or the seller) to set a baseline price for assets being sold through an auction process. The stalking horse bid serves as a starting point to attract other potential bidders and ensure a fair market price.”
Sit, a resident of Hong Kong, is the general manager of Top Pride International Ltd., a wholesale distributor of cosmetic products, IPI said.
Recently, District Court for the NMI Designated Bankruptcy Judge Robert J. Faris approved the stipulation of IPI and the committee of unsecured IPI creditors to establish a bidding procedure for the sale of the casino investor’s assets; to designate a stalking horse bidder; to schedule an auction and a sale hearing; and to establish assumption and assignment procedures.
According to the stipulation, the minimum bid requirement for all IPI assets is $10 million in cash.
“The Bidding Procedures shall govern the selection of the Stalking Horse Bidder, bids and proceedings related to the Auction and the sale of the Assets,” Judge Farris said in an order issued on Jan. 8, 2025.
Pursuant to the court order, if necessary, an auction will be held on Feb. 26 at 8 a.m. “to determine the highest and best bid for the assets of the Business.”
According to the notice filed by IPI and the committee of creditors, the stalking horse bidder will pay $12.5 million to purchase the casino assets.
If Sit is designated as the stalking horse bidder, he will deposit $1.25 million with Pacific American Title Insurance & Escrow Company as a “good faith deposit.”
IPI, in turn, will sell to the purchaser, “free and clear of all liens, claims and encumbrances, substantially all of [its] assets….”
These include all contracts and unexpired leases; all of seller’s membership interest in Imperial Pacific Properties LLC.; all edifices, construction improvements and related fixtures located at the real property known as CPL Derence Jack Rd, Orchid Street in Garapan, Saipan; liquor and tobacco inventory; accounts receivable; and accounting ledgers.
The purchaser, Loi Lam Sit, will also have an option to acquire IPI’s casino license if the bankruptcy court approves the assignment. Sit will pay IPI an additional amount of $2.5 million within 90 days of the final order.
The proposed agreement with IPI, the committee of creditors, and Sit may be terminated, “if the purchaser is not the winning bidder at the auction.”
IPI filed for Chapter 11 bankruptcy in the District Court for the NMI on April 19, 2024, saying it owed creditors over $165.8 million.
IPI operated a casino on Saipan for four years until the Covid-19 pandemic forced its closure in March 2020.
Chapter 11 bankruptcy allows a business corporation to restructure its debts and continue operating.
