CNMI government opposes IPI assets sale
It argues that the proposed sale would not benefit all creditors.
Northern Mariana Islands.- The CNMI government has opposed Imperial Pacific International (IPI)’s request to approve bid procedures for the sale of its unfinished Garapan hotel casino and real estate assets to Loi Lam Sit for US$10m.
The opposition, filed by Robert Glass Jr., chief solicitor of the office of the attorney general, argues that the proposed sale primarily benefits Loi Lam Sit, rather than all creditors. Glass also raised concerns about the potential violation of lease provisions, including the need for advance approval from the Department of Public Lands and the requirement of a 15 per cent assignment fee.
Glass said the low bid for IPI’s significant assets raised questions about whether the proposed transaction was truly at arm’s length. He also argued that the bidding process proposed by IPI would allow Loi Lam Sit to “win” without demonstrating his ability to complete the building project or show sufficient capacity and capital to comply with the lease terms which require the hotel to be completed.
IPI filed for Chapter 11 bankruptcy in April, citing debts of over US$165.8m. Among the company’s largest unsecured creditors are the CNMI Treasury, MCC International, the Commonwealth Casino Commission (CCC), the law offices of Hughes Hubbard & Reed, Century Estate Investment, CNMI Division of Revenue and Taxation, and Joshua Gray with claims ranging from US$5.68m to US$62m.
The government aimed to convert IPI’s Chapter 11 bankruptcy to Chapter 7. The move would have allowed the liquidation of all IPI’s property and assets to settle its debts, however, chief judge Ramona V. Manglona of the District Court for the NMI denied the government’s motion.
