Previous Story
UMDA gets limited liability status
|
Posted on May 17 2005
The United Micronesian Development Association, which recently purchased Saipan Laulau Development Inc., has received conditional approval of its request for a limited liability corporation status.
The Marianas Public Land Authority’s approval was granted to UMDA-Laulau subject to legal review, according to MPLA public information officer Ed Arriola Jr.
The decision was made during a recent board meeting on Rota.
A limited liability corporation status shields the owners of a company from being held personally liable for debts the company may incur unless they have signed a personal guarantee.
Also under this status, all business losses, profits, and expenses flow through the company to the individual members, without taxation on the entity itself.
In March, MPLA voted unanimously to approve the sale of Saipan Laulau Development to UMDA.
Saipan Laulau, which operates the Laolao Bay Golf Resort in Kagman, sold the company to UMDA at a loss of about $50 million.
Saipan Laulau vice president Hiroyuki Saito said in an earlier interview that the company had invested a total of $61 million to the Laolao Bay Golf Resort in Kagman. The purchase deal however amounted only between $8.5 million and $10 million.
Saito explained that the company had been operating the golf resort at a substantial loss over the past years, particularly after the Asian economic crisis hit the tourism industry in 1997.
He said that the company’s current annual gross revenues reach only about half the $11 million SLDI used to earn before 1997.
