‘IPI is standing fast with plans’

Despite the COVID-19 pandemic that has severely affected its operations in the CNMI and the lack of top officers on the ground, its newly hired general counsel, Michael W. Dotts, describes it as just a “transition” phase for the company, that it will eventually hire a chief executive officer and chief financial officer and, at that point, get a fulltime regular general counsel. But during this transition, Dotts said he is going to provide general counsel services for IPI.

At the same time, Dotts said yesterday that there is no plan for IPI to file for bankruptcy. With IPI plagued with money woes, rumors have been rife about an imminent bankruptcy filing but, when asked about this by reporters, Dotts said that all he can say is that he has not been instructed to file for bankruptcy.

“If this were an American company, we’ve done it already,” he added.

He said people don’t know how long this COVID-19 pandemic is going to last. “It could be in the next year before we see the business really come back, which means a very large commitment from the parent company to fund this company [IPI] for an extended period of time,” he added. IPI’s parent company is the Hong Kong-based Imperial Pacific International Holdings Ltd.

Questionis have been raised whether IPI can still continue with its casino/resort project on Saipan considering the many lawsuits it is facing, and its problems meeting employees’ payroll and even paying for Commonwealth Utilities Corp. electricity billings.

On CUC bills, Dotts said IPI paid CUC and when he called the workers’ housing, he was told that power was already being restored. Dotts said he is not sure where the funding came from.

On the issue of the Financial Crimes Enforcement Network of the U.S. Treasury Department raising red flags about possible Bank Secrecy Act violations at the casino, Dotts said he cannot comment on it other than to say that he agrees with the Commonwealth Casino Commission executive director’s statement that it’s a very serious matter.

“FinCEN I can tell you is a complicated set of laws. Some of them are very technical. It’s easy sometime to make a technical violation,” he said.

In the case of a technical violation, Dotts said the regulatory authority usually either gives company a warning, or gives a fine. “They can also rise to a criminal level. If it arises to the criminal level of money laundering, it’s a very serious matter. If it does happen, a company would be shut down,” the lawyer pointed out.

Dotts said IPI hired last year a legal counsel from the U.S. mainland who specializes in FinCEN matters. “Only a handful of attorneys do FinCEN,” he added.

As for his role as general counsel for IPI, Dotts said, “General counsel means anything that happens. An employee stealing something in the morning, there’s an accident on the job site in the afternoon, the government wants to investigate. Anything that happens, you can call the attorney and address it.” Dotts said he is going to try to do that for now until IPI gets more settled. “Just on a contract basis,” he said, adding that he has to notify the Commonwealth Casino Commission to obtain its approval.

Dotts said attorney Kelley Butcher has left IPI effective last Friday, so IPI needs to replace her as an in-house counsel.

Dotts disclosed that attorney George Hasselback is taking over as counsel for IPI in some cases. He said Hasselback will handle the U.S.A. Fanter’s defamation lawsuit and a recycling center’s lawsuit. He said Hasselback will also handle part of the Pacific Rim Land Development LLC’s lawsuit.

Dotts will be doing IPI’s appeal for the U.S. Court of Appeals for the Ninth Circuit to reverse U.S. District Court for the NMI Chief Judge Ramona V. Manglona’s grant of summary judgment that found IPI liable to pay $6.9 million to Pacific Rim.

Dotts is also dealing with IPI’s motion for a stay on the execution of the $6.9 million judgment pending resolution of the appeal.

Pacific Rim’s lawsuit against IPI has two parts—a breach of contract part where Pacific Rim is demanding $10 million in damages, and a promissory note.

“So there was already summary judgment in favor of Pacific Rim on the promissory note, not on breach of contract. It’s separate. There’s a big contract, then there’s a promissory note. And Pacific Rim sued for both,” he said.

On the breach of contract issue, Dotts said IPI has defenses and counterclaims. In the example he cited, Dotts said that Pacific Rim overcharged IPI.

On IPI’s motion to stay or suspend proceedings, Dotts said IPI is offering $9 million worth of properties to secure payment to Pacific Rim. He said this will be the issue at this Thursday’s hearing in federal court. Dotts said they offered the $9 million package of properties that IPI’s subsidiaries own around the island to secure the $6.9 million judgment. Pacific Rim has yet to agree to this arrangement.