US firm seeks to collect from defunct company

An Oregon-based corporation has lodged a civil suit against Basic Construction Inc. on grounds that the now defunct firm failed to settle bills from various goods and services previously availed from the plaintiff.

Dateline Exports Inc., a firm selling construction materials, is seeking to collect over $120,000 from Basic. It alleged that the company has neglected to honor a Feb. 14, 2000 promissory note where Basic Construction vowed to settle the outstanding balance plus interest.

The agreement came after the plaintiff withdrew a suit filed before the US District Court on similar complaints. Court documents state that the note was incorporated into the order of dismissal.

Dateline Exports, through counsel David G. Banes, stated that although Basic Construction has made certain payments based on the judgment, it has failed to settle an outstanding balance owed for the judgment deadline.

As a result of this, Dateline Exports acquired an equitable interest in Basic’s property, including its inventory items.

But the defendant, without warning, transferred the majority of its inventory to the Marshall Islands in September 2000, according to court papers.

The plaintiff has asserted that the defendant’s move was not under its ordinary course of business and such conveyance was made without receiving adequate or fair consideration.

According to Dateline Exports, Basic’s transfer of property substantially included all of its liquid assets, causing the defendant to close shop and become insolvent

The plaintiff added that the abrupt transfer of property has left the defendant without available funds to pay the agreed up judgment in full.

Dateline also accused Basic of acting with intent to hide, delay, and defraud its creditors due to its failure to announce its plans to transfer it inventory.

The defendant should have complied with the CNMI Bulk Sales Act, according to the plaintiff.

The plaintiff is then urging the court to render judgment that would set aside or annul Basic’s conveyance or transfer of inventory.

The Oregon-based company has also asked the court to grant it monetary equivalent of the property in the amount to be determined in trial, but at least $120,000 plus interest.

The plaintiff has further requested the court to restrain the defendant from selling, leasing or dispensing of or in any way encumbering any remaining property including its leasehold interest in real property.

The court has also been asked to appoint a receiver who would take possession of all the defendant’s assets.

Plaintiff also prays for award of costs, fees, and other relief the court deems proper.

Basic Construction closed its Saipan shop last year following major decline in construction activites in the Northern Marianas, as a ripple effect of the 1998 economic slowdown.

The local construction industry is one of the business sectors heavily impacted by financial upheavals that fanned towards the Northern Marianas from neighboring countries in Asia, which saw severe devaluation of their individual currencies against the US dollar.