IT owes its judgment creditors over $21 million and the CNMI government over $79 million, but Imperial Pacific International is keeping its hopes alive by filing an appeal with the U.S. Supreme Court. The casino investor wants the high court to set aside the ruling of the U.S. Court of Appeals for the Ninth Circuit that reversed the District Court for the NMI’s decision to refer IPI’s casino-license revocation case to arbitration. The Ninth Circuit’s ruling allowed the Commonwealth Casino Commission to revoke IPI’s casino license.
On May 23, 2022, IPI requested a temporary restraining order against the casino commission to prevent it from convening an enforcement hearing that would revoke IPI’s exclusive casino license. The District Court granted IPI’s motion for a TRO. IPI also sought 1) an order compelling the commission to participate in a non-binding arbitration with the American Arbitration Association pursuant to Section 30 of the casino license agreement; and 2) a preliminary injunction against the commission from proceeding with the revocation without first going to arbitration. In its ruling, the District Court stated that IPI had not waived its right to arbitrate, and “must be allowed to arbitrate all disputes.” the District Court’s ruling to the Ninth Circuit, which reversed the District Court’s decision.
On Nov. 6, 2023, IPI, through its counsel of record, Xiaosheng Huang, filed with the U.S. Supreme Court a petition for a writ of certiorari seeking a review of the Ninth Circuit ruling. According to IPI, “Considerable uncertainty and inconsistency exists in the federal and state courts concerning delegation of arbitrability determinations in arbitration agreements with carve-outs, a particular problem given arbitration agreements routinely carve out particular claims or remedies.”
Unpaid fees
IPI, which shut down in March 2020 due to Covid-19 restrictions, now owes the CNMI government over $62 million in exclusive casino license fee and more than $17.6 million in regulatory fee, for a total of over $79.6 million in unpaid fees. The unpaid casino license and regulatory fees are owed for the years 2020 through 2023. IPI had until Dec. 30, 2023, to pay what it owes the CNMI government.
In 2014, after it was awarded an exclusive license to operate a casino on Saipan, IPI, then known as Best Sunshine, announced that it would invest $3.14 billion in the CNMI, and this would include the construction and development of casino resort in Garapan. IPI’s investment and the significant increase in South Korean and Chinese arrivals ended the CNMI’s economic slump that started in 1998, and prevented the collapse of the government’s pension system. However, following the global pandemic restrictions, IPI’s revenues plummeted from $412 million in 2018 to $3.1 million in 2020.
Judgment creditors
IPI owes a total of $21,108,568.71 to judgment creditors in federal and local courts, and the CNMI Division of Revenue and Taxation, which holds a tax lien against the casino investor. The judgment creditors recently filed a stipulation in federal court concerning the distribution of auction proceeds.
On Oct. 26, 2021, the federal court established a receivership in equity and appointed Clear Management as the limited receiver to liquidate IPI’s casino gaming equipment. Since the limited receivership commenced, Clear Management has conducted several auctions of IPI’s gaming equipment. As of Dec. 1, 2023, Clear Management reported that the first seven auctions, after the deduction of its commissions and attorneys’ fees, had produced approximately $1.5 million for distribution, and this amount could increase as a result of additional future auctions of IPI’s remaining gaming equipment.
According to the stipulation, the consenting judgment creditors agreed that the auction proceeds should be distributed promptly. They request that the court orders such action.
<p style=”text-align: center;”><strong><em>”IPI…now owes the CNMI government over $62 million in exclusive casino license fee and more than $17.6 million in regulatory fee, for a total of over $79.6 million in unpaid fees.”</em></strong>