Auction of IPI’s assets to begin on August 30

Imperial Pacific International (CNMI) LLC’s casino, Imperial Palace Saipan, in Garapan. (CHRYSTAL MARINO)

The U.S. District Court for the NMI has lifted the stay on the limited receivership that was previously granted against Imperial Pacific International (CNMI) LLC and its assets and has ordered Clear Management to proceed with its auction of IPI’s assets starting Aug. 30.

According to an order issued by District Court for the NMI Chief Judge Ramona Magalona’s yesterday, the stay on the limited receivership that was previously granted in favor of U.S.A Fanter Corp. but has since been assumed by former IPI workers who had sued IPI for labor violations is lifted and Clear Management may proceed with the auction of IPI’s casino gaming machines no sooner than Aug. 30, 2022.

Manglona also stated in her order that if IPI has any objections to items on the list of assets that will be sold, or items listed on Clear Management’s inventory website, IPI must lodge any objections no later than Aug. 30.

In addition, IPI was ordered to pay plaintiffs’ attorneys’ fees for the time spent litigating IPI’s objection to the limited receivership proceeding even after it was found in default, and the plaintiff must submit a petition for fees and costs no later than Aug. 30.

According to court documents, the court previously determined that IPI defaulted under the stay agreement for failing to increase the supersedeas bond they previously agreed to, and the plaintiffs, former IPI workers alleging labor violations, have sought to lift the stay on the limited receivership so that IPI’s gaming equipment could be sold to satisfy their judgment against IPI.

At a hearing last Aug. 16, the court granted the plaintiffs’ request and ordered that the stay on the limited receivership be lifted. However, the court issued its official decision and order yesterday to memorialize its reasoning.

In her order, Manglona also addressed what IPI assets can and cannot be sold.

Manglona said she previously asked the parties to brief the issue of the appropriate scope of what items are included in the limited receivership and may be sold by Clear Management.

However, other than its arguments that the gaming machines cannot be sold because of 4 CMC § 51564, and arguing that the entire limited receivership should be dissolved, IPI did not provide an analysis based on the court’s orders as to what items should or should not be sold by Clear Management.

So, because IPI failed to follow the courts request, Manglona found that all IPI “casino utilities” previously examined and identified by Clear Management can be sold.

“Clear Management examined a March 2020 list provided by IPI that identified 404 electronic gaming machines as well as 185 units of what Clear Management labelled “casino utilities,” which primarily includes devices used to count, shuffle, or deal cards. Therefore, these gaming machines and the playing card utilities, to the extent they can be found, may be sold by Clear Management,” Manglona said.

The order further provided that Clear Management is authorized to sell all gaming equipment identified during the inspection to fulfill the judgment in this matter.

Manglona also noted that IPI’s lawyer had previously produced a “list of assets” that contained 39 pages of “gaming equipment, including hundreds of chairs and stools, poker chips, playing cards, security or surveillance equipment, and other items. These too have been included in the scope of IPI assets that can be auctioned off.

“The understanding that the parties and the court proceeded with was that Clear Management could sell those assets from IPI’s list that it identified during inspection. Subsequently, the inventory listed by Clear Management on its auction website after inspecting the IPI premises included not only slot machines, but also gaming tables, chairs, and stools; and chips, cards, cash counters, safes, card shredders, locks, and surveillance system equipment. These items, too, are included in the scope of the limited receivership,” Manglona said.