IPI opposes Pacific Rim’s bid to auction off its assets

Imperial Pacific International (CNMI) LLC is opposing Pacific Rim Land Development LLC’s request for an order authorizing the contractor to auction off IPI’s gaming machines and vehicles, saying this will harm the casino company.

The more viable option, IPI lawyer Michael Dotts said, is to have an IPI investor deposit nearly $6 million in a CNMI bank to secure the money for Pacific Rim.

In its motion submitted to the U.S. District Court for the NMI, Dotts said that allowing Pacific Rim to auction off IPI’s gaming machines and vehicles would cause irreparable harm to the company.

With IPI’s gaming equipment, Dotts said that auctioning them off means they would likely be sold at only a fraction of their cost because casinos are closed worldwide, and there is no market for the equipment.

Based on IPI’s audited books, the gaming equipment is valued at more than $20 million, but the best estimate is that it would sell for $2 million, Dotts said. Additionally, no one in the CNMI but IPI can legally own the gaming equipment so they would need to be sent off island, which would make it difficult for IPI to reopen and IPI would have to buy all of its gaming equipment again.

As for IPI’s vehicles, Dotts said that, besides the fact that many of its vehicles are still being used daily by IPI’s remaining employees, it would be extremely difficult for the company to replace them, both financially and logistically.

On top of that, Dotts said IPI vehicles may be worth about $6 million based on IPI’s audited books, but, a more realistic estimate of what will be obtained if they are auctioned is about $300,000.

As for the sale of IPI’s heavy equipment, Dotts said it could result in the delay of construction and possibly render the casino’s completion impossible. Replacing the heavy equipment will be particularly difficult as it is logistically difficult to ship such equipment to Saipan, Dotts said.

IPI offers a “better” alternative, according to Dotts. IPI is now requesting the federal court to allow its investor, Pacific International Property Management LLC, to deposit $5,599,975 in a CNMI bank to secure the payment to Pacific Rim. With this alternative, Dotts said, Pacific Rim is fully secured and no more harm needs to be done to IPI’s business in the process of Pacific Rim executing on its judgment.

IPI has appealed the judgment so it is also asking the court to enter an order restricting the bank account designated to secure Pacific Rim.

Dotts said that, should IPI prevail on the appeal, the funds can be released back to the investor, and should Pacific Rim prevail on the appeal, then all restrictions placed on the funds can be lifted and Pacific Rim will be fully paid.

“IPI now has an investor who has placed on deposit $5,599,975.00 in a CNMI bank and who is willing to allow this account to be used or transferred to secure payment of the judgment pending appeal,” Dotts said.

Pacific Rim recently moved the court for an order for turnover, assignment, and judicial sale of IPI’s gaming machines and heavy equipment and vehicles for the purpose of reducing the judgment amount entered against the casino.

Pacific Rim said the balance due on the judgment is not less than $5,525,363.98.