THE designated stalking horse bidder, Loi Lam Sit, made a good faith deposit of $1.25 million on Feb. 10, 2025, to purchase Imperial Pacific International’s casino assets, according to a motion filed in the federal bankruptcy court.
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.”
In a declaration filed in court, Sit stated that he is a resident of Hong Kong and the general manager of Top Pride International Ltd., a wholesale distributor of cosmetic products. He also invests in the Hong Kong stock market and “relies on his inheritance” for his livelihood.
IPI and the committee of unsecured creditors, in a 36-page motion, requested the court to sell the casino assets –– subject to overbid and court approval — to Loi Lam Sit, on the terms and conditions set forth in an asset purchase agreement.
IPI and its creditors also asked the court for an order “(1) approving sale of all or substantially all of the debtor’s [IPI] assets, free and clear of all liens, claims, and encumbrances, subject to overbids; and (2) authorizing the assumption and assignment of certain contracts to the successful bidder.”
According to the parties, “a sound business justification exists” for the sale of the casino assets.
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.
Exit strategy
According to the motion filed by IPI and the committee of unsecured creditors, the casino investor’s “primary real estate assets consist of (1) a hotel building currently under construction with a casino, (2) a leasehold interest in approximately 19,204 square meters of land leased from the DPL under Lease Agreement No. LA-15-002S, and (3)…ownership interest in Imperial Pacific Properties LLC, which holds leasehold interests in eight lots adjacent to the Leasehold Property.”
The motion added, “The debtor’s [IPI] initial exit strategy involved reinstating its casino license and resuming operations, forming a plan based on this premise. However, it became clear early that the debtor could not reach an agreement with the [Commonwealth Casino Commission] to renew the Casino License and restart operations. Recognizing that the Debtor’s original exit strategy was no longer feasible, the Committee worked diligently and collaboratively with the Debtor to implement a comprehensive sale process for the Debtor’s business and assets.”
On Oct. 5, 2024, the court approved the committee’s application to employ Intrepid Investment Bankers LLC as an investment banker.
Since September 2024, IPI, the committee and Intrepid have “diligently crafted comprehensive marketing materials, set up a virtual data room and executed an extensive marketing process, all of which have facilitated a transparent and equitable process for potential buyers to conduct due diligence on the assets,” the motion stated.
In addition, “Intrepid has undertaken extensive efforts to market the casino assets and to identify potential buyers since its engagement.”
Moreover, Intrepid’s marketing efforts have included contacting nearly 100 potentially interested buyers, including casino operators and distressed investors in Southeast Asia, Oceania, the United States, and around the world, the motion stated.
“Of these parties, at least eight remain active under non-disclosure agreements and Intrepid has received one qualified bid (the Stalking Horse Bid) as well as other indications of interest, which are expected to be formalized ahead of the Qualified Bid Deadline on February 21, 2025,” the motion said.
It added that IPI, the committee, and Intrepid have negotiated with Sit, resulting in an asset purchase agreement under which Sit will buy the casino assets for $12.5 million (excluding the casino license), with an additional $2.5 million if he is allowed to assume the casino license with CCC’s consent
Sit has agreed to purchase IPI’s real property interest, tangible personal property, inventory, accounts receivables, as well as certain other assets, the motion stated.
