Dotts: IPI will guarantee proposed lien on its leasehold interest

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IMPERIAL Pacific International will guarantee a proposed lien on its leasehold interests, its attorney Michael Dotts said.

“A breach of this warranty will trigger the judicial sale of all the properties,” he added.

IPI is appealing to the U.S. Ninth Circuit Court of Appeals the recent decision and order of District Court for the NMI Chief Judge Ramona V. Manglona who found the casino developer in breach of promissory note with its former contractor, Pacific Rim Land Development LLC.

Dotts has requested the federal court for a delay in the execution of the judgment pending the appeal of IPI.

The lawyer also proposed the leasehold interest of IPI in real property as security bond to secure payment of the judgment.

For his part, Pacific Rim attorney Colin Thompson filed an opposition, saying the motion of IPI to stay is another attempt to delay payment.

The federal court recently issued an amended civil judgment in favor of Pacific Rim in the amount of $6.8 million including the principal amount and attorney’s fees and costs.

In response to the opposition of Pacific Rim, Dotts said that the leasehold interests of IPI “are mostly free and clear of encumbrances.”

IPI has pledged as other security leasehold interests in Brown House, Chalan Laulau Dorm, Joy Beach Hotel, Lucy Apartments, MGM, Miller Estates, Queens Apartments, and the Flame Tree Terrace.

Dotts said “with the exception of one lot in the Flame Tree lease currently under litigation, all other leasehold interests are free and clear of encumbrances.”

He said the leasehold interests are valued at $9 million, “above the $6.8 million judgment.”

Dotts said IPI believes that these leasehold interests will maintain their value if the market improves as the economy recovers following the Covid-19 pandemic.

“IPI is in a unique position on Saipan, an island where less than 35,000 people are of working age,” Dotts told the court. “IPI employs 1,066 people and because of Covid-19 it had to close its doors following the governor’s directive. IPI employs a large portion of people [1,066] of working age on Saipan and but for a stay it will have to close permanently and lay off workers. The effect of Covid-19 on a main employer in Saipan presents a case that is far from generalized.”

He said these circumstances show the probability of irreparable injury tilting sharply in favor of IPI as required by the Ninth Circuit to show a strong likelihood of success on appeal.

Dismissing the assertion of Pacific Rim that IPI failed to provide evidence or make any statement that such evidence existed, Dotts mentioned former IPI attorney Joey San Nicolas’ declaration, which stated, among other things, that “documentation showing each of [the] Pacific Rim employees’ qualifications are not within IPI’s records and files. I believe those records and documents are within the sole possession and control of Pacific Rim.”

Dotts said IPI would have survived summary judgment because IPI could have discovered the employee qualification documents in the sole possession and control of Pacific Rim.

“The public interest weighs in favor of stay because but for stay, the financial effects on the pockets of the people of Saipan are grave and the everyday livelihood of their families is at stake,” Dotts said. “During Covid-19, consideration should be given to alleviating financial distress and not to aggravating it. Denial of the stay will make life more difficult for a lot of people in this unusually difficult time.”

Judge Manglona has not issued a writ of execution in favor of  the request of Pacific Rim to direct the U.S. Marshals Service to seize money owned or controlled by IPI from Bank of Saipan, City Trust Bank, Bank of Guam, and First Hawaiian Bank to satisfy the previous court order.

However, she granted the second motion of IPI to shorten the time to hear its motion to stay or suspend the execution of the judgment, and scheduled the hearing for Thursday, June 4, 2020 at 9:30 a.m.

But on Wednesday, the judge issued an order vacating the hearing, stating that the court will not entertain oral arguments on the motion and will make a decision on the submitted briefs instead.

Pacific Rim sued IPI for breach of contract for refusing to pay for services in the amount of $5.65 million.

In turn, IPI filed counterclaims against Pacific Rim for promissory fraud, fraud in the inducement as to the promissory note, violations of the Consumer Protection Act, and breach of contract. IPI counterclaims demand payment of damages.

 

 

 

 

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