IMPERIAL Pacific International and the committee of unsecured IPI creditors are seeking the federal bankruptcy court’s approval to establish a bidding procedure for the sale of the casino investor’s assets.
The minimum bid requirement for all IPI assets is set at $10 million in cash.
In a stipulation filed on Jan. 4, IPI and the committee of unsecured creditors also proposed to designate a stalking horse bidder; to schedule an auction and a sale hearing; and to establish assumption and assignment procedures.
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.”
The federal bankruptcy court earlier rejected IPI’s previous proposed bidding and sale procedures for its hotel casino and other real estate assets. The court, at the same time, granted the request of the committee of unsecured IPI creditors to hire Intrepid Investment Bankers LLC to market IPI’s properties for a higher sale price.
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.
According to the recently filed stipulation by the parties, the debtor or IPI and the committee intend to sell all or substantially all of the casino’s assets.
“A Prospective Bidder may bid on any of the Assets, either in parts or as a whole, subject to the conditions set forth herein, but may not submit a bid solely for the Casino License. The ability to undertake and consummate a sale of the Assets shall be subject to competitive bidding, as set forth herein, and approval by the Court,” the stipulation stated.
Any party interested in submitting a bid for any of the assets should contact the committee’s investment banker:
Intrepid Investment Bankers LLC
Attn: Lorie Beers,
Carl Comstock
or Lucy Yang
LuYang@intrepidib.com
The stipulation also proposes to allow IPI and the committee to select a stalking horse bidder and seek court approval of a break-up fee and reimbursement of expenses, if any, for documented, actual and necessary expenses incurred by any stalking horse bidder in connection with the submission of its qualified bid.
IPI and the committee “shall be authorized to file a motion seeking authority to approve the Stalking Horse Agreement, subject to overbids, and to allow Breakup Fees on or before February 14, 2025. The Debtor [IPI] and the Committee shall serve the Sale Motion on the Sale Notice Parties and any Prospective Bidders.”
IPI and the committee also requested the court to hold a sale hearing on March 25, 2025, at 9 a.m.
“All parties-in-interest shall have the right to object to the Sale Motion and the Breakup Fees on any grounds,” the stipulation stated.
As for the bid deadline, “Any prospective bidder that intends to participate in the auction must submit in writing to [IPI], the committee, and Intrepid a qualified bid on or before February 21, 2025, at 12 p.m.”
Among other requirements, a qualified bid must disclose the legal identity of each person or entity bidding for the assets and/or otherwise sponsoring, financing (including through the issuance of debt in connection with such bid), or participating (including through a license or similar arrangement with respect to the assets to be acquired in connection with such bid) in the auction in connection with such a bid and the complete terms of any such participation.
A qualified bid must also disclose any past or present connections or agreements with IPI, any stalking horse bidder, any other known prospective bidder or qualified bidder, Loi Lam Sit (the IPI lender), or any officer or director of any of the foregoing (including any current or former officer or director of IPI).
A qualified bid must identify the following: 1) the assets to be purchased, including any executory contracts and unexpired leases that, as of the submission of such a bid, the prospective bidder proposes to be assumed and assigned by IPI in connection with the proposed sale; and 2) the liabilities, if any, to be assumed, including any debt to be assumed.
The stipulation proposes to have a minimum bid of no less than $10 million in cash for all of IPI’s assets, including for the lease of property located at Cpl. Derence Jack Road, Orchid Street, Garapan, Saipan.
The stipulation was signed by attorney Aram Ordubegian, who represents the committee, and attorney Chuck Choi, who represents IPI.
