Federal court lifts stay on sale of IPI casino assets

Chief Justice Ramona Manglona has ordered IPI to object to a listing of items for auction within two weeks.

Northern Mariana Islands.- Chief Justice Ramona Manglona has ordered Clear Management to proceed with its auction of IPI assets starting August 30. The judge has granted a motion filed by seven workers to lift Imperial Pacific International’s moratorium on the sale in compliance with a US bankruptcy judge’s decision.

The seven workers had sued IPI for labour violations and human trafficking. On May 26, 2021, Judge Manglona issued a default judgment in favour of the workers as well as post-judgment interest and attorney fees totalling $5.9m. IPI appealed to the US Court of Appeals for the Ninth Circuit after its motion for reconsideration was rejected. 

Judge Manglona has now ordered IPI to object to auctions of items listed on Clear Management’s website within two weeks. She informed the parties that any sale would require court approval.

According to Saipan Tribune, IPI has also been ordered to pay plaintiffs’ legal fees for the time spent litigating IPI’s objection to the limited receivership proceedings. The plaintiff must submit a petition for fees and costs no later than August 30.

According to court documents, the court previously found that IPI violated the stay agreement by failing to increase a previously agreed appeal bond for the judgement in the lawsuit filed by USA Fanter Corp. The plaintiffs sought to lift the stay so that IPI’s gaming equipment could be sold to satisfy their judgment against IPI.

At an August 16 hearing, the court granted the plaintiffs’ motion and ordered the suspension of limited receivership to be lifted. The court issued a formal decision and order yesterday (August 18). In her order, Manglona stated which IPI assets could and could not be sold.

Manglona said: “Clear Management examined a March 2020 list provided by IPI that identified 404 electronic gaming machines as well as 185 units of what Clear Management labelled ‘casino utilities’, which primarily includes devices used to count, shuffle, or deal cards. Therefore, these gaming machines and the playing card utilities, to the extent they can be found, may be sold by Clear Management.”

Earlier this month IH Group chairman Kyunam Kim promised that work at Imperial Pacific International‘s casino will continue and that the project will contribute to the Northern Mariana Islands’ economy.

In May, IPI reported it had signed a memorandum of agreement with South Korea’s IH Group to secure funding to help it reopen its casino in Garapan and pay some of its obligations, including payroll and outstanding payables to vendors. However, so far there has been no news regarding the agreement between the companies.

CCC insists it has a future beyond IPI

Commonwealth Casino Commission chairman Edward C. DeLeon Guerrero has said that the regulator would continue to exist were it to revoke the licence of the Northern Mariana Islands’ sole casino operator.

In an interview with Mariana’s Variety, he said: “The CCC has the authority under Public Law 21-38 to issue another licence so it’s not like it’s game over.”

He added: “If things don’t work with Imperial Pacific International, we can still figure out a way to make the gaming industry a viable industry here in the Commonwealth.”