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NMI government, Pacific Rim to share IPI net proceeds

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DISTRICT Court for the NMI Chief Judge Ramona V. Manglona has issued an order granting the stipulation of settlement between the CNMI government and Pacific Rim Land Development LLC to share Imperial Pacific International LLC’s net proceeds.

The CNMI Division of Revenue and Taxation on Aug. 20, 2020 filed a notice of tax lien against IPI in the amount of over $9 million, and told the court that its lien takes precedence over the claims of Pacific Rim.

The CNMI government and Pacific Rim have now agreed to share “IPI’s assets or proceeds from the sale of assets.”

The stipulation noted that the court granted Pacific Rim’s writ of execution against certain funds held by Security Title, as escrow agent.

After receiving the writ, Security Title initiated an impleader action, Security Title Inc. v. Pacific Rim Land Development, LLC et al. in which it deposited $2,470,051.93 with the CNMI Superior Court.

The parties in the impleader action have agreed to stipulate for release of the escrow funds to Pacific Rim if Pacific Rim agrees to guarantee payment for the removal of Tower Crane 4 from the IPI construction site.

According to the stipulation, Pacific Rim has agreed to guarantee payment for the removal of Tower Crane 4 from the IPI construction site up to $200,000 on the condition that the crane removal cost is not credited as a proceed against Pacific Rim’s judgment.

This was reflected in Judge Manglona’s order granting the settlement.

As for the escrow funds, the judge stated: “Pacific Rim shall retain 80% of the net proceeds after permitted deductions and promptly pay the [CNMI] Government 20% of the net proceeds after permitted deductions; provided, however, [that] Pacific Rim will pay any expenses related to removal of the crane in an amount not exceeding $200,000 from its share of net proceeds. “

Any amounts paid for removal of the crane in excess of $200,000 may be a permitted deduction for the purposes of calculating net proceeds, the judge said. “Any money expended by Pacific Rim for the removal of Tower Crane 4 shall not reduce the amount of the judgment,” she added.

Regarding the currency in IPI’s casino cage, Judge Manglona said Pacific Rim “shall retain 25% of the net proceeds after permitted deductions and promptly pay the CNMI 75% of the net proceeds after permitted deductions.”

As for the other IPI assets, the judge said: “The distribution of net proceeds from other IPI assets shall be in a proportion to bring the parties to equal shares of total net proceeds.”

She added, “Unless the escrow funds are not released to Pacific Rim prior to the sale of other IPI assets, the government shall receive one-third (1/3) of the net proceeds from the sale of any other IPI assets until the parties have received equal distributions, at which point the parties will split further net proceeds equally.”

The court order further provides that in the event the escrow funds are not released to Pacific Rim prior to the sale of any other IPI assets, “the parties shall cooperate in achieving equal distribution of total net proceeds in a fair and equitable manner.”

“In no event shall either party’s distributional share of net proceeds from the sale of other IPI assets be less than one-third (1/3),” the judge added.

The district court will retain jurisdiction to adjudicate any disputes or problems arising from the stipulation and issued order.

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

On April 27, 2020, the  District Court for the NMI entered a judgment in favor of Pacific Rim.

On May 2, 2020, the  court entered 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.

Pacific Rim attorney Colin Thompson said the judgment remains unsatisfied in the amount of $5,525,463.98 plus interest, costs, and fees that have yet to be addressed.


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