IPI found in default of stay agreement

The U.S. District Court for the NMI has found Imperial Pacific International (CNMI) LLC in default of the stay agreement between the casino investor and seven former workers who had sued the company for alleged labor violations.

According to an order issued over the weekend by District Court for the NMI Chief Judge Ramona Manglona, the court found that IPI failed to comply with its obligation under the stay agreement to make payment by May 1 or file notice, and that it failed to cure the default within 10 days.

“Accordingly, the court finds IPI to be in default of the stay agreement,” she stated.

Because of this, Manglona directed American Contractors Indemnity Company, or ACIC, to release to plaintiffs the $3 million secured by the supersedeas bond.

However, as to the plaintiffs’ request that the stay on the limited receivership for IPI’s casino gaming equipment be lifted, the court found that further briefing is necessary on the issue.

The court ordered IPI to file its brief in opposition to the lifting of the stay on the limited receivership no later than June 2, while plaintiffs were given until June 7, to file their response.

Manglona then set a hearing on the plaintiffs’ request to lift the stay on the limited receivership for June 9.

The receivership remains on hold until June 15.

According to court documents, IPI did not timely increase the supersedes bond on May 1.

Plaintiffs sent a default notice to IPI the next day but IPI failed to make payment within the 10-day cure period. IPI also never contacted plaintiffs during that period.

As provided in the stay agreement, plaintiffs filed a motion requesting the court to declare that IPI is in default and order the remedies provided in the stay agreement.

According to Saipan Tribune archives, the court issued a judgment in this matter in favor of the workers in the amount of $5,430,595.58.

IPI appealed the judgment to the Ninth Circuit, but initially did not post a bond or any security.

In response, the plaintiffs commenced efforts to enforce their judgment, including obtaining a writ of execution on IPI’s personal property which was executed by the U.S. Marshals on July 20, 2021.

The workers and IPI then executed an agreement to stay enforcement that includes multiple appendices, with an effective date of Feb. 3, 2022, which shall stay enforcement of their default judgement in exchange for IPI securing a supersedeas bond in the amount of $6 million on or before June 30, 2022.

IPI fulfilled its initial obligations under the stay agreement by securing a supersedeas bond in the amount of $1 million on Feb. 11, 2022, and reimbursing certain expenses and a portion of the legal fees incurred by plaintiffs in seeking to enforce their judgment prior to executing the stay agreement.

On Feb. 18, 2022, the parties filed a stipulation finding that the stay agreement in its entirely, including all appendices, provides plaintiffs with adequate security.