Pacific Rim says IPI had committed to paying it in full

A contractor who is suing the Imperial Pacific International (CNMI) LLC for alleged non-payment of $5.65 million for services claimed that IPI had committed to paying the company in full once it receives a second $100 million from a new Japanese funding group.

In his declaration filed before the federal court last Tuesday, Keith J. Stewart, manager and owner of Pacific Rim Land Development LLC, said this second drawdown was thought to be received in June 2019, then July, then August.

“I was told by IPI many, many times that IPI did not have the funds to pay at that particular time, but would ultimately pay the full amount due,” Stewart said.

His declaration was filed in support of Pacific Rim’s reply to IPI’s opposition to Pacific Rim’s second amended application for a mechanic’s lien. He did not name the Japanese funding group in his declaration Tuesday.

In May 2019, Saipan Tribune ran a story about investment firm GCM Ltd. of Japan that was reportedly set to infuse fresh capital to the IPI project. GCM was reportedly investing $500 million. GMC had reportedly deposited $100 million with IPI in May 2019.

U.S. District Court for the NMI Chief Judge Ramona V. Manglona heard Pacific Rim’s second amended application for mechanic’s lien Thursday last week. The hearing will be continued on Feb. 11, 2020, at 9am.

Colin M. Thompson is counsel for Pacific Rim. Stewart was with Thompson in the courtroom. David G. Banes and Cong Nie argued as IPI counsels.

Pacific Rim is suing IPI for breach of contract for allegedly refusing to pay for services in the amount of $5.65 million. Pacific Rim claimed to have substantially completed or completed the agreed-upon construction work for IPI’s casino-resort project on Sept. 30, 2018.

Pacific Rim also filed an application for a mechanic’s lien on IPI’s hotel-casino project and on the land that it sits on. A mechanic’s lien refers to a security interest in the title to property for the benefit of those who have supplied labor or materials that improve the property.

The court then consolidated Pacific Rim’s lawsuit and the application for a mechanic’s lien.

In IPI’s opposition to Pacific Rim’s second amended application for mechanic’s lien, Banes said the application should be dismissed.

In his declaration last Tuesday, Stewart said IPI just asked for them to be patient and work with them, which they did until they became exhausted from the broken promises to pay and filed suit.

Stewart said that he met with IPI again last Oct. 25 to resolve their dispute after IPI stopped making payments on the promissory note. Since then, Stewart said that IPI has not offered any payment to resolve the dispute.

Citing Thompson’s communication to then-IPI general counsel Phillip J. Tydingco, Stewart said they tried to mediate the dispute and set up mediation. “IPI has never proposed a date for the mediation,” Stewart said.

Pacific Rim and IPI entered into a construction contract in February 2018. Stewart said Pacific Rim submitted monthly invoices to IPI for the labor and materials provided to the Imperial Pacific Resort. He said IPI hired a third-party auditor company, Bluestone Management, to review the invoices.

Stewart said IPI’s owners representative, Zhou Jing, who was provided with full authority to bind IPI with respect to the work and the construction contract for the duration of their agreement, reviewed their invoices through August 2018. He said IPI paid the first few invoices but, as time went on, they slowed payments and then stopped altogether.

Stewart said that on Sept. 21, 2018, IPI and Pacific Rim finalized negotiations about the amounts due under the construction contract and signed the promissory note. He said that in November 2018, when IPI failed to make full payment on the note, IPI told him that the payment would simply be a little late. Stewart said that from November 2018 through the time the lawsuit was filed, Pacific Rim did everything it could to work with IPI. He said IPI repeatedly indicated payments would be made, but only a few partial payments were processed.

“IPI proposed revised payment plans and committed to making payments, but never met their obligations,” Stewart said.

In IPI’s opposition to the Pacific Rim’s second application for mechanic’s lien, Banes said Pacific Rim intentionally overstated the costs it incurred in the construction of IPI’s hotel/casino project in Garapan. Banes said Pacific Rim fraudulently obtained from IPI a promissory note, which is therefore unenforceable.