Imperial Pacific Int’l May Be Close to Deal on Saipan’s Imperial Palace
Posted on: June 15, 2022, 05:42h.
Last updated on: June 15, 2022, 10:35h.
Imperial Pacific International (IPI) and the Commonwealth of Northern Mariana Islands (CNMI) reportedly have an agreement in the works. If the two sides sign off on it, it would allow IPI to keep the Imperial Palace casino in Saipan.
The CNMI Federal Court has received a joint filing from the Commonwealth Casino Commission (CCC) and IPI, according to The Guam Daily Post. They announced that they have reached an agreement regarding the terms of a settlement, although the two sides haven’t finalized all of the details.
At the end of May, IPI announced that it expected to receive $150 million in capital. That money would allow it to pay off its debts to the CNMI government and creditors, as well as reopen the casino. In addition, it would provide the funding it needs to get the expansion of the Imperial Palace underway again.
IPI Not Yet In the Clear
Neither the CCC nor IPI has released the details of the settlement. However, the filing indicated that they would provide an update at the beginning of July.
The two sides are reportedly only in the negotiation stage of the settlement. In other words, they haven’t finalized an agreement. There is a chance that they may not be able to meet each other’s demands.
IPI recently signed a memorandum of understanding (MOU) with the IH Group in order to provide the capital. The MOU states that the first tranche of the agreement would be deposited with IPI by May 2022 if it is fully executed.
IPI is to receive the second tranche sometime this month. The company asserted that if the CCC continues to try to revoke IPI’s license on the grounds of nonpayment of fees, the decision would only damage the CNMI.
If it can’t operate the casino, it can’t pay its bills. IPI accuses the CCC of being “arbitrary” and “capricious” as it tries to revoke the company’s license. IPI blames its downfall on “force majeure,” despite overwhelming evidence to the contrary. For years, well before COVID-19, the company faced accusations of mismanagement and potential fraud related to Imperial Palace.
CCC suspended IPI’s casino license in May of last year because it failed to meet certain requirements in its license agreement. These included the payment of the annual $15.5-million license fee in August 2020 and its annual $3.1-million regulatory fee in October.
In addition, IPI failed to contribute $20 million to the community benefit fund in 2018 and 2019. This contribution was a condition of its license in Saipan. Furthermore, it failed to fulfill its minimum $2-billion capital requirement. That was the result of its continued failure to meet its financial obligations.
IPI Finds Ways to Delay Action
It’s possible that IPI has an actual plan to save its Saipan license. However, the CCC and the CNMI need to approach the settlement with a certain degree of caution. It has repeatedly shown an ability to delay enforcement actions without fulfillment.
CNMI Chief Judge Ramona Manglona, after IPI announced the capital injection, extended the expiration date of a temporary restraining order (TRO) she issued against the CCC to July 8. The TRO prevented the commission from conducting a hearing on the suitability of IPI to continue to hold a casino license.
The judge stated in her order that the stay would remain in effect until either party notified the court of a failure to reach a settlement, combined with the submission of a request that the court hold a new hearing. Alternatively, if IPI showed it had settled its debts, the judge could consider canceling the stay.
At the time, both IPI and the CCC agreed to the TRO, which initially expired on June 8. Judge Manglona also set a status conference at 9 AM on Friday, July 1, and wants the CCC and IPI representatives present.