IPI opposes expanding receivership

Imperial Pacific International (CNMI) LLC is opposing a proposal by the court-appointed receiver Clear Management Ltd. to expand the scope of the receivership to include all of IPI’s personal properties.

In a report it filed last April 21, Clear Management said expanding the receivership to include all IPI assets other than real property is necessary in order to cover and pay for all of the money that IPI owes.

Clear Management is proposing that the court issue an order stating that, “[b]ased upon information provided by the receiver after inquiry, it is clear to the court that the funds received and to be received from the sale of IPI’s gaming equipment will be insufficient to pay IPI’s creditors in full.”

In addition, the order stated that IPI’s non-gaming assets have and will likely to continue to deteriorate, and that the court should order the expansion of the receivership to authorize the receiver to sell all of IPI’s personal property.

However, according to IPI in its opposition, the receiver has not demonstrated that the judgments against IPI exceed the amounts likely to be raised through the sale of gaming equipment that is already subject to the receivership.

“Accordingly, the court should refrain from expanding the scope of the receivership at this time,” said IPI.

IPI argued that to date, four auctions of IPI gaming equipment have taken place and the receiver has made or proposes to make sales totaling $989,554. In addition, the receiver has made sales totaling $302,107.20 to Angel Playing Cards resulting in total sales of $1,291,661.20.

“The 10% commission due to the receiver on these sales totals $129,166.12. In addition, the court has approved the disbursement of $88,225.71 in expenses and additional disbursements to the receiver. A motion for disbursement of a further $11,554.26 in expenses (reflecting the receiver’s expenses for March 1 to 31) is currently pending,” said IPI.

Assuming all pending sales and disbursements are granted by the court, IPI claims the total amount of commissions and disbursements to the receiver will be $228,946.09, leaving a total of $1,062,715.11 available for payment to IPI’s judgment creditors.

According to court documents, District Court for the NMI Chief Judge Ramona Manglona raised last April 6 the issue of whether the scope of the receivership should be expanded to include additional IPI assets.

The court ordered the parties to meet and confer and submit a proposed order regarding the conditions of the receivership by April 21.

If no agreement is reached between the parties, the court indicated it would issue a briefing schedule by April 28.

The court also ordered the receiver to file an updated list of judgment creditors from both the U.S. District Court and CNMI Superior Court.

IPI claims that to the extent any meet and confer took place, IPI was not informed or included. IPI also claims that it received no indication of the receiver’s position on the question of whether and how the receivership should be expanded until after business hours on April 21, when the receiver filed a report of limited receiver, which also included a proposal to expand the scope of the receivership.