The investment holding company engaged in the gaming and hospitality business Imperial Pacific International Holdings Limited (IPI) is facing turbulent times ahead as the Commonwealth Casino Commission (CCC), the regulator in the Commonwealth of the Northern Mariana Islands (CNMI) issued an ultimatum to the company.
CCC Ran Out of Patience
The gaming regulator ordered effective June 25 with a 15 day deadline that IPI should appoint a new Chief Executive Officer (CEO). On top of that, the casino operator should honour all its financial obligations as to the CNMI government, so to private vendors. Lastly, IPI should make arrangements within 30 days to set aside money enough to pay for all of its employees for a period of 3 months. Failure to comply with any of the three orders issued by the CNMI gaming regulator implies the operator will lose its casino license.
Money for the 3 months of payroll, estimated to be $1.4 million should be kept in an IPI account with a US or CNMI bank, CCC explained Monday, a condition that is the most worrying for Imperial Pacific as it fears the allocated payroll funds will be frozen or even seized due to an ongoing legal action against the company from one of its contractors, Pacific Rim.
Contractor Granted Writs of Execution
In April, the District Court for the Northern Mariana Islands issued a ruling in favour of the contractor granting Pacific Rim with a writ of execution to seize money owned or controlled by IPI in four banks, Bank of Saipan, City Trust Bank, Bank of Guam, and First Hawaiian Bank.
IPI was sued for breach of contract and breach of promissory note for refusing to pay for services to the amount of $5.65 million, construction work for the IPI casino resort project in 2018. For its part, Imperial Pacific filed counterclaims against Pacific Rim for promissory fraud, fraud in the inducement as to the promissory note, violation of the Consumer Protection Act, and breach of contract. After the court ruling, the judgement amount against IPI went up to $6.8 million, including the principal and attorney fees and costs.
In June, the court granted a second writ of execution to Pacific Rim, which stated they believed IPI was holding cash accounts in Security Title Inc. and Pacific American Title Inc.
Despite IPI arguing the stipulation regarding the 3 months payroll money account, the CNMI gaming regulator clearly distanced from the legal dispute between the operator and its ex-contractor, stating that the CCC can do nothing to help Imperial Pacific bypass a court order. Furthermore, IPI should resolve its issue with Pacific Rim to make sure the money for the 3-month payroll is protected.