Tinian Shipping settles $7.5M debt

Operators of the Tinian-Saipan ferry service have settled their dispute with a financial firm over their debts amounting to over $7.5 million, according to a statement released yesterday by the Tinian Shipping & Transportation, Inc.

Details of the settlement were not disclosed, but the shipping company said the agreement reached recently with Debis Financial Inc. allows the permanent release of the two vessels plying Tinian and Saipan to Tinian Shipping.

The news came nearly two months after the U.S. District Court on Saipan ordered the release of the two vessels on Oct. 4 following payment of $800,000 to the court by the shipping firm.

The company, whose parent company owns the Tinian Dynasty Hotel and Casino, reached a “conclusive settlement” with Debis with the assistance of Federal Judge Alex R. Munson after more than eight hours of negotiations on Nov. 10.

It quoted Tinian Shipping manager Peter Cheung as saying that TSTI and Debis “voluntarily dismissed some concerns raised during the previous hearings to push the settlement.”

This was an important decision by both parties reached at the final hearing and has resulted to the “permanent release of the ferries to TSTI,” added the statement.

Rupert Hansen, attorney for the shipping company, was also quoted as saying that it was a “fair decision that would surely benefit the interests” of both companies.

The dispute between Tinian Shipping and Debis stemmed from failure by the ferry operators to settle its loan obligation. Debis has claimed in court papers that it owes them $7,566,511.33 in principal, aside from accrued interests through Feb. 28 of this year in the amount of $11,555.06 and $75,314.08 in late charges.

Tinian Shipping has admitted that it has not paid the entire amount but maintained that Debis has no right to foreclose on the ship’s mortgage.

Last October, Tinian Shipping paid the court $800,000 representing the loan payment which the company is obligated to pay to Debis every six months.

Judge Munson at the same time ordered the attorneys for both parties to “confer in good faith” in order to resolve their differences on whether the leasehold mortgage is acceptable as a substitute security.

The Tinian Casino Gaming Control Commission has allowed the ship’s parent company, Hong Kong Entertainment Ltd., to execute a leasehold mortgage on the real estate property where its hotel casino is situated in favor of the Clerk of Court of the U.S. District Court.

The move was intended to allow Tinian Shipping to operate M/V Tinian Express and M/V Saipan Express which were both seized in August by the court pending the litigation. They resumed operations only after the Oct. 4 release order.

According to the company, the two vessels are now servicing passengers between the two islands under their normal operations with six daily round trips carrying an average of 600 CNMI residents and foreign tourists a day.

Mr. Cheung also announced free ride to all CNMI residents and guests from Saipan to Tinian to express their “heartfelt appreciation” to the public.