Court will order sale of IPI assets

The Imperial Pacific Resort in Garapan. (NEIL FAMA)

The U.S. District Court for the NMI has issued an ultimatum against Imperial Pacific International (CNMI) LLC: Pay the back wages of former IPI employees in the next 30 days or it will create a receivership to sell off its assets.

U.S. District Court for the NMI Chief Judge Ramona Manglona adopted yesterday the recommendation of USDOL to appoint a receiver if IPI does not come up with over $1.2 million to satisfy the remainder of the consent judgment within 30 days, or by March 1. That remainder refers to the amount that IPI owes in back wages to about 136 former H2-B employees from 2016 and 2017.

In addition, Manglona sustained the stop-work order for IPI employees but modified it so that all other departments, except construction workers, could return to work.

“The stop-work order has been proven to be a very good incentive,” she said.

During yesterday’s hearing, USDOL asked the federal court to create a receivership that will sell off IPI assets if it fails to satisfy the remainder of the consent judgment in the next 30 days.

USDOL senior trial attorney Boris Orlov proposed, as an option to the court, that IPI be given 30 days to satisfy the remainder of the consent judgment to purge themselves from contempt. If IPI does not comply, Orlov suggested a receiver be appointed.

A receiver is an individual authorized by the court to gather assets and auction them off to satisfy a court judgment.

Orlov said that IPI still owes $1.2 million in back wages pursuant to the consent judgment.

“IPI has made a payment of $233,000 to the Department of Labor, of which $36,000 went to H2-B workers who were underpaid. We believe $197,000 was in civil money penalties so the department is going to apply that amount to the wages due under the consent judgment, which will bring the current amount due to $1.2 million,” he said.

Orlov said the second issue that needs to be resolved under the consent judgment is the escrow deposit to cover future payrolls.

“We were asking for various amounts, with the number of workers being reduced, we understand from IPI that it is now about $200,000 per pay period. $800,000 can cover two months of payroll so that amount is acceptable,” he said.

Also during the hearing, Michel Dotts, former IPI general counsel, reported that payrolls 21-26 have been paid off and nearly all employee housing have been restored to habitable conditions as of yesterday.