Receiver hoped to pacify worried BoS depositors

Superior Court Presiding Judge Edward Manibusan ruled late Tuesday to appoint businessman and lawyer Randall Fennell as Bank of Saipan receiver for a period not exceeding 30 days.

The judge’s ruling came even as a question was left hanging on whether the court has “competent jurisdiction” to decide on the appointment of the said outside expert, due to the government’s failure to cite a cause of action in its filed petition against BoS.

Another hearing with regard to the continued appointment of a receiver has been set for May 29, 2002, 10am.

The government, in an ex parte motion filed at the Superior Court, had sought the immediate installation of a receiver in a bid to thwart fears of a bank run, amid strong suspicions of BoS’ purported financial crisis.

Manibusan, in a three-page order, however, stated that an ex parte appointment of a receiver may be permissible under emergency circumstances or where notice is impractical.

“In the case at hand, respondent [Bank of Saipan] received notice of the petition and does not oppose the appointment of a receiver. Moreover, given the exigent circumstances outlined by the petitioner at the hearing, the court hereby grants the petition to appoint a receiver,” Manibusan said.

But the judge also ordered the petitioner, acting Commerce Secretary and CNMI Director of Banking Fermin Atalig, through counsels Allan L. Dollison and Alexis Fallon, to amend its civil complaint pursuant to the rules of civil procedure stating a cause of action against BoS within five days.

Manibusan cited that the rules of civil procedure state that “there shall be one form of action to be known as a “civil action” and that “a civil action is commenced by filing a complaint with the court.”

“Here, the petition as filed does not meet the requirements of Rules 2 and 3, though petitioner makes certain allegations against respondent,” said the judge.

Manibusan appointed Fennell as BoS receiver to perform the following tasks:

• manage the withdrawal of deposits,

• take possession of assets, liabilities, books, records, papers and files of every description belonging to the bank

• collect all loans, fees and claims of the bank

• manage the daily operations of the respondent as a fiduciary to the depositors including the CNMI government and its agencies, and

• take all measures to generate revenue, collect sums owed to respondent, and other means to re-establish respondent’s solvency and ensure its continued operations.

Fennell is a 23-year CNMI resident and was once court-appointed as the receiver for the now defunct Commonwealth Bank of the NMI Inc. for seven years.

During a court hearing held Tuesday, Fennell, a lawyer in inactive practice, vouched for his qualifications to take on the receivership. The government, who recommended him, also established that Fennell has no conflict of interest with the BoS, though he admitted that a minor shareholder of the local bank is a business associate of his.

Meanwhile, once the government files a complaint pursuant to rules of civil procedure, the respondent is expected to file its answer as required by the same rules.

This developed as Secretary Atalig noted that the CNMI government is confident that all necessary steps are being taken to protect the assets of both public and private depositors held by the BoS.

“Representatives of the government met with the Board of Directors of the Bank of Saipan together with Mr. Fennell. We are assured that the receiver has full access to the bank, and we are pleased that officials of the bank are cooperating to provide him all necessary financial information,” he added.

The commerce chief also stressed that the government will continue to closely monitor the situation in order to protect the assets of the CNMI and ensure all depositors are treated fairly.