Imperial Pacific has a month to pay debt, or face receivership

Wooden blocks with the word Debt and the clock in the hands of a businessman
Wooden blocks with the word Debt and the clock in the hands of a businessman

The line in the sand that has kept Imperial Pacific International (IPI) in control of the Imperial Palace casino resort project in Saipan has moved several times, but not anymore. Amid investigations that have spanned more than five years and acknowledgments by the company that it is both clueless and powerless, it appears that someone is finally taking the bull by the horns to force IPI into carrying itself like a reputable and ethical company. As the Commonwealth of Northern Mariana Islands (CNMI) spends much more time than it should dealing with IPI’s issues, CNMI Chief Judge Ramona Manglona is laying down the law. The embattled company needs to either make good on its outstanding obligations to employees or it will face receivership. She gave IPI until March 1 to comply, according to Asian Gaming Brief

IPI, after finally being painted into a corner, began paying its employees all of the money they’re owed, which covers several months’ worth of work. It didn’t explain where the money came from or why it wasn’t able to get it sooner, but IPI still owes. In addition, the company has to find $800,000 that it can put into an escrow account in order to be able to pay employees when IPI repeats itself. If the company can’t make good on its financial obligations by the beginning of March, Judge Manglona is ready to send the company into receivership and liquidate its assets, something others have wanted for several months. 

Not only does IPI have to scramble now to cover its debt, but Judge Manglona denied a request by the operator to lift her stop-work order. Construction equipment at Imperial Palace will stay immobilized for now, although administrative employees and other workers can get back on the clock. This decision to keep the construction stop-work order in place is almost a guarantee that IPI won’t be able to meet its February 28 launch deadline, which would mean the company would be in trouble once more. Any delays could lead to a breach of contract, although, given IPI’s track record, it will try to deny responsibility. 

As an example of the company’s failure to own up to its mismanagement, IPI’s acting CEO, former senator Ray Yumul, completely deflected any responsibility the company may have for the issues related to its inability to pay its obligations to the CNMI government. He blames that government and regulators for the problems, ineffectively arguing that the government has made too many demands of the company and that IPI’s required contributions to the local Community Benefit Fund are “ridiculous.” In remarks to the House Gaming Committee, Yumul asserted, “It should have just been a simple bid—highest bidder takes the license, builds the building,” adding that the local government’s demands are “how IPI went from a promising industry to a struggling one today.” He neglected to mention the part where IPI could have refused to accept the terms of the licensing agreement and sought new business ventures elsewhere, and the fact that IPI has yet to “build the building” it promised to have ready three years ago.