Imperial Pacific Given One Month Deadline Or Face Receivership
The woes of Imperial Pacific International (IPI) worsened this week after regulators laid down the law. A judge ruled Imperial Pacific has until March 1 fully repay debts to employees or face receivership.
Imperial Pacific is on its knees and liquidation looks like a very real possibility. Work on its Imperial Palace casino in Saipan halted after the company couldn’t meet financial obligations. A revelation the company hadn’t paid its employees for several months didn’t sit well with regulators and government officials.
The Commonwealth of Northern Mariana Islands (CNMI) ordered Imperial Pacific to halt work on its Imperial Palace project until employees received their owed wages. A threat to jail Imperial Pacific Chairperson Cui Li Jie prompted the company to find a huge sum of money.
Some employees received wages owed after the company quickly raised US$3.36 million. Imperial Pacific didn’t reveal where or how it raised the funds, just that it had. It makes you wonder why they didn’t pay their staff if raising money was so easy.
Many employees received outstanding wages but the company still owes US$1,183,000. Chief Judge Ramona ordered Imperial Pacific to fully pay this sum by March 1. Judge Ramona ordered IPI pay an additional US$800,000 into an escrow account to cover future employee salaries.
Judge Denies Imperial Pacific Permission To Continue Building
The judge’s ruling is far from ideal for the struggling company. It is now in a mad scramble to raise almost US$2 million in less than 30-days. Judge Romona turned down an appeal to resume building work on the Imperial Palace resort, also.
This means it is beyond doubt Imperial Pacific will fail to meet a February 28 deadline to complete the construction of its casino resorts. This in itself breaches the company’s casino licence. The first phase should have completed in 2018. Imperial Pacific request an extension to 2019 and then to 2022. This latest setback casts more doubt on construction ever completing.
Judge Manglona is ready to appoint a receiver and liquidate the company’s assets if fails to meet its financial obligations. This isn’t the first time calls for Imperial Pacific’s head have been made.
Imperial Pacific Has Many More Debts
Pacific Rim submitted a formal request to sell the stricken company’s assets less than three months ago. Pacific Rim Land Development went to court in an attempt to claw back US$5.6 million. It requested permission to sell casino gaming equipment and vehicles worth a combined $26 million.
The gaming equipment is valued at $20 million with the vehicles worth an additional US$6 million. Selling the assets, however, would only raise US$2 million. In addition, only Imperial Pacific is allowed to own such equipment so the sale would have to be abroad. Furthermore, selling the blackjack tables, roulette wheels etc would leave the casino unable to operate when it finally opens.
Michael Dotts is a lawyer representing Imperial Pacific. He explained more about Pacific Rim’s request.
“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 prove difficult for IPI both financially and logistically.”
No Comeback On IPI’s Lack of Direction
It is likely the struggling company isn’t taking Judge Manglona’s threats seriously. Dozens of threats of action have landed at the company’s doors but nothing ever happens.
The Commonwealth Casino Commission hinted at a public hearing into the company’s financial suitability. Nothing has ever come of that threat either.
