It was obvious to everyone two years ago that Imperial Pacific International (IPI) was having difficulty taking care of its responsibilities. The company behind the highly unstable Imperial Palace casino resort in Saipan has continued to have issues covering its financial obligations to both those it contracted to build out the Imperial Palace, as well as to the Commonwealth of the Northern Mariana Islands (CNMI), but has managed to string everyone along. It has had to defend itself several times in court, as well as in front of CNMI gaming regulators, and needs to come up with hundreds of millions of dollars to make good on outstanding debt and fines. Among all that are millions of dollars a court ordered it to pay to Pacific Rim Land Development, which it still hasn’t produced. As a result, Pacific Rim, which led much of the expansion on Imperial Palace, wants a judge to give it permission to sell certain IPI assets, including vehicles and gaming equipment, to cover part of the debt.
Marianas Variety reports that Pacific Rim has submitted a formal request to be able to sell the assets to recover some of the $5.6 million IPI owes it per the court order. The gaming equipment reportedly has a value of around $20 million, while the vehicles are said to be worth around $6 million. However, selling the assets, according to IPI’s lawyers, would only net about $2 million, still leaving the casino operator short on its outstanding debt and without the means to earn revenue.
IPI lawyer Michael Dotts asserts, “The gaming equipment is carried on IPI’s audited books at a value of more than US$20 million, but the best estimate is that will sell for US$2 million. No one but IPI can legally own it on Saipan so it will all need to be sent away. To reopen, IPI will have to purchase all of its gaming equipment again. When IPI reopens many of the vehicles that Pacific Rim seeks to have auctioned off will need to be replaced, and this could be difficult for IPI both financially and logistically.”
As an alternative, IPI is proposing it be allowed to turn to an investor for the money. It reportedly has found someone oblivious enough to be willing to turn over almost $6 million, which would be placed into a CNMI bank to secure the outstanding debt owed to Pacific Rim. IPI is appealing the court’s ruling in favor of Pacific Rim, and the funds would essentially be held in escrow pending the outcome of that appeal.
IPI has made a habit out of dancing around its financial obligations over the past few years. Even after the Commonwealth Casino Commission (CCC) drew a line in the sand and promised not to allow any more excuses, IPI crossed the line and the CCC did little more than draw a new line in the sand, which will probably be moved again and again. However, the CCC might be feeling a little pressure, with the CNMI’s governor, Ralph Torres, perhaps dropping a hint that it’s time to quit stalling.
Torres said during a radio news brief last Friday that, should the CCC feel that a public hearing is warranted to determine IPI’s “financial suitability,” he would support the idea. The CCC has hinted at the need for a public hearing, but nothing has yet been established. Torres added that he wants IPI to remain in the CNMI if it can “take care of their duties and responsibilities for the Commonwealth, [like] every other company and industry.”
