CCC orders IPI to pay vendors

The Commonwealth Casino Commission board approved yesterday an order requiring casino licensee Imperial Pacific International (CNMI) LLC to settle the uncontested amounts it owes its vendors.

CCC board chair Juan M. Sablan and other commissioners adopted the order despite the criticism of some vendors in a previous meeting that the draft order has no teeth since it does not mention any penalty against IPI.

Sablan asked the commissioners to “go ahead” and vote on the order after listening to the advice of CCC legal counsel Mike Ernest not to change the draft. Ernest said the order has teeth but that the vendors don’t fully understand it.

When asked for comments about CCC’s order, Phillip J. Tydingco, who appeared for IPI general counsel Joey Patrick San Nicolas and on behalf of IPI, said they are going to take back the order and study it.

“[It will] obviously have an impact, so we’ll talk [that] over with our management and our parent company. That’s all I can say about it,” Tydingco said.

With respect to some vendors’ complaint about IPI not paying for some services, Tydingco said IPI is “very sympathetic” to the concerns of the vendors. He quoted IPI chief financial officer Ed Chen as stating at yesterday’s meeting that he wants to work out the payment issue with most of the vendors.

“That’s his [Chen] statement,” Tydingco said.

CCC adopted the order after many vendors publicly complained at some of the commission’s meetings that IPI has not paid them for their services.

CCC said this calls into question IPI’s willingness or ability to comply with its contractual, regulatory, or statutory obligations.

Last Dec. 19, representatives of many vendors and former IPI contractors who are allegedly collectively owed $35 million, jointly appealed to CCC to take action against IPI, whom they accused of engaging in a pattern and practice of breaching contracts and dishonoring obligations to licensed professionals in the CNMI.

In the order that was approved yesterday, Sablan said the commission deems it necessary and proper to require IPI to “settle any outstanding obligations owed by contract, license agreement, regulation, statute, or otherwise which are 90 days or most past due.”

CCC ordered IPI to settle in full within 30 days from yesterday any uncontested account payable with a licensed vendor or private entity which is 90 days or more due.

CCC further ordered that, no later than 30 days from yesterday, the IPI chairman or its highest ranking executive, and chief financial officer, must each, in writing, certify that IPI is solvent.

CCC ordered the IPI chairman, or its ranking executive, and CFO, to certify that IPI has the ability to pay debts as they mature and become due, and that IPI has paid all such debts within 90 days of their accrual.

CCC ordered them to certify that IPI has the ability to pay to private entities all payments required by contract, and IPI has the no such uncontested payables 90 days or older.

CCC also ordered them to certify that IPI has the ability to fully build the entire gaming facility in Garapan.

CCC further ordered that if the IPI chairman and CFO cannot make some sort or all of the required certifications, they must explain in writing their inability to so certify and provide an explanation why the certification cannot be made, and outline the steps IPI will take to ensure that the required certifications can be made.

During the meeting’s public comments portion, Antonio Muña, consultant of USA Fanter Corp. Ltd., briefly explained the history of their demands for payment.

Muña said that due to the lack of response/interest to resolve the dispute by way of dispute resolution provisions and/or for mediation, USA Fanter has instructed its legal counsel to sue IPI to collect the unpaid billing.

Muña said the CCC order needs teeth as it’s all bark. “There has to be a penalty,” he said.

Muña said IPI is not a sinking ship without a captain but a ship without a rudder.

Former Commonwealth Zoning board chair Diego C. Blanco said that he read in the newspaper a few weeks ago IPI’s statement that it has paid all local vendors with outstanding amounts between $20,000 to $300,000.

“As you can see, people are coming asking for help and get paid,” said Blanco, who introduced himself as a concerned citizen.

Blanco said the vendors need CCC’s help for them to get paid by IPI. “It’s a shame that we allow this company to continue this kind of practice. What is the commission for? Please help us,” Blanco said.

Pacific Rim Land Development manager and owner Keith J. Stewart said he hopes that CCC puts more teeth into its order against IPI.

Stewart said they are extremely patient with their demands for payment from IPI. “But at some point, enough is enough. Move on,” Stewart said.

Dr. Ken Shankweiler, a project consultant for J.M. Aquino PC, agreed that the commission has to put some teeth into its order. “Someone has to put a hammer now. It’s as simple as that,” he said.

He said these small vendors have many employees that have families to support and are severely hurt by IPI not meeting its obligations.

After hearing the vendors’ comments, Sablan assured that the commission now is ready to act.
When asked for IPI’s comments, Tydingco appealed to the commissioners not to adopt the order.