Review of Castro’s order in BoS appeal issue sought

The counsel of former Bank of Saipan receiver Randall T. Fennell yesterday requested the CNMI Supreme Court to review Associate Justice Alexandro C. Castro’s order that denied their motion to declare them as parties in an appeal from a trial court’s ruling regarding spending cap issue.

Attorney David Axelrod and the law firm of Schwabe, Williamson & Wyatt, counsel for Fennell, asked the high court to review Castro’s order “by a full panel” or by three justices.

The law firm, through counsel attorney Sean E. Frink, said upon such panel reconsideration, Castro’s order that was issued on Dec. 7, 2005 should be vacated.

Frink said the law firm’s standing to participate in the appeal proceedings should be confirmed or its intervention in the appeal permitted.

In the alternative, Frink moved for continuation from the high court that it will not reach any of the legal or factual issues relating to the facts or proceedings of the BoS directors’ litigation against Fennell.

The law firm requested to allow them to file a motion to disqualify Castro and Chief Justice Miguel Demapan from ruling upon the firm’s request for review by a full panel and in the appeal generally.

In Oct. 2005, Associate Judge Juan T. Lizama issued an order, stating that BoS is not implementing reasonable cost controls in connection with the bank’s board of directors’ lawsuit against Fennell.

The judge ordered that the bank and its board, officers, agents, employees and attorneys, shall not expend any additional corporate funds in support of the board’s lawsuit against Fennell.

He gave the bank 45 days to submit to the court a plan detailing how the costs will be controlled.

The Bank of Saipan Inc. appealed the spending cap order.

Fennell and his counsel filed motions with the high court to either confirm or declare their status as appellee, intervene, or grant them amicus curiae (friends of the court) status.

On Dec. 7, Castro denied the request of Fennell and his counsel to declare them as parties in the appeal. He also denied their request to be heard at oral arguments.

Castro, however, granted Fennell and his counsel’s motion to participate in the appeal as amicus curiae.

The justice ruled that although Fennell and the law firm have business before the receivership case pending in the Superior Court, “that business is only tangentially concerned with preserving the assets of the bank.”

In the law firm’s motion for review, Frink said that while Castro’s order implies that the court will limit this appeal to the cost issues set forth in the receivership court’s previous order, his client remains concerned that this appeal actually involves legal and factual issues in the bank directors’ litigation.

As a named party to the directors’ litigation, the firm “undoubtedly” has standing and a right to be heard with respect to these issues, which are central for the director litigation, Frink stressed.

Frink asserted that courts have long recognized that amicus status is insufficient to protect the interests of a party whose rights and interests may be affected by the disposition of a case.

In April 2002, the Commerce secretary shut down BoS, concluding that the bank was insufficiently liquid to continue to meet depositors’ demands.

BoS was put into receivership and Fennell was appointed receiver. He served as receiver from April 30, 2002 until his discharge on Sept. 27, 2002.