IPI aims to sell unfinished Garapan hotel-casino by year-end

Imperial Pacific International has informed the federal bankruptcy court that it had reached an agreement with unsecured creditors.

Northern Mariana Islands.- Imperial Pacific International (IPI) and its committee of unsecured creditors have informed the NMI bankruptcy court of their intent to sell IPI’s unfinished Garapan hotel-casino by the end of this year.

It was reported they IPI has begun interviewing potential investment bankers and real estate brokers and plans to file a motion to approve a “stalking horse” bid, subject to overbids, to sell the hotel and subsequently file a liquidating plan to pay creditors according to priority. A stalking horse agreement is made before an auction to set a minimum price, maximising the value of a bankrupt firm’s assets.

Last Friday (July 5), IPI attorneys filed a motion opposing the CNMI’s request to convert IPI’s Chapter 11 bankruptcy to a Chapter 7 Bankruptcy, which would mandate the liquidation of all IPI’s assets. The motion mentioned that IPI and its committee of unsecured creditors have agreed on a sale of IPI’s assets under Section 363 of the US Bankruptcy Code. This type of sale allows debtors to meet their obligations to creditors by selling their assets and using the proceeds to settle their debts.

IPI’s legal team argued that converting the case to Chapter 7 would not serve the best interests of creditors and that liquidations tend to be more expensive and time-consuming. They said a Chapter 7 Trustee might lack the necessary funds to maintain and secure the asset, which, given the hotel’s poor condition and security needs, could result in abandonment.

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