IMPERIAL Pacific International LLC has filed an opposition to USA Fanter Corp. Ltd.’s motion for appointment of receiver for sale of real property.

“The appointment of receiver is a drastic remedy that is to be deployed only sparingly in the most extreme circumstances upon a proper evidentiary showing,” said attorney Stephen Nutting who represents IPI in the construction contractor lawsuit.

In this case, said Nutting, a writ of execution has been issued over assets valued by USA Fanter at $3.25 million ($1 million more than USA Fanter’s judgment with interest), and only two months ago, a receiver was appointed to liquidate many of these assets.

Remarkably, he added, USA Fanter now seeks the appointment of a second receiver to seize and liquidate separate assets that lie at the core of IPI’s casino and resort project.

According to the lawyer, USA Fanter did not provide evidence as to how the forced disposition of a key part of the resort complex might impact the value and interests of other creditors and stakeholders and the extent to which the value realized might be grossly disproportionate to the losses of such other stakeholders.

Nutting said, “Overall, USA Fanter fails entirely to indicate why [its] already appointed receiver is not adequate to provide a basis for the extraordinary relief sought.”

Despite its heavy pleading and evidentiary burden, Nutting said, USA Fanter’s motion offers speculation and innuendo in place of required evidence under the Federal Rules of Evidence and the Federal Rules of Civil Procedure to show that a receiver is necessary or appropriate.

He said USA Fanter concedes that there is no evidence of fraud on the part of IPI.

USA Fanter has not submitted any evidence that the property is in danger of being lost, concealed, injured, diminished in value, or squandered, Nutting added.

“And USA Fanter fails to offer any evidence to support its bald assertions that IPI is insolvent,” Nutting said.

He said USA Fanter does not present evidence, or even address, why it is unable to collect its judgment through other available means, “including through writ of execution already issued by the court and the limited receivership that the court has already approved.”

“Indeed, the only purported evidence that USA Fanter has offered is a declaration from its proposed receiver, in which that individual admits his lack of qualification to value or market IPI’s real property, and offers a valuation of the property that lacks any apparent basis, methodology, or supporting evidence,” Nutting said.

USA Fanter’s request to appoint a receiver appears to be grounded more out of convenience than necessity, the lawyer added.

“But a receiver is not a remedy that is granted because it is convenient for a judgment creditor; it is an extraordinary remedy which must be based on evidence demonstrating its necessity. Further, the appointment of receiver could significantly impair IPI’s ability to operate as a going concern without regard for IPI or its other stakeholders, and would instead result in the haphazard liquidation of IPI’s assets by an admittedly unqualified receiver.”

In August 2021, Chief Judge Ramona V. Manglona of the District Court for the NMI granted the request of USA Fanter to appoint Hong Kong-based Clear Management Ltd. to administer, collect, or sell any casino gaming property in which defendant-judgment debtor, IPI, has an interest; and to perform any other acts required to satisfy the judgment of $2,089,345.28.

On Sept. 9, USA Fanter through attorney Colin Thompson asked the federal court to appoint a receiver for IPI, this time, for sale of real property.

USA Fanter sued IPI for its failure to pay the full amount due to plaintiff under their construction contract for labor and materials provided for the improvement of IPI’s real property.

The lawsuit stated that IPI had paid USA Fanter $300,000 only and the unpaid balance due was not less than $2,089,345.28.

The judge has issued a final judgment in favor of USA Fanter.

More than 15 creditors/entities and their attorneys filed an appearance to attend the hearing for the appointment of a receiver for IPI scheduled for Thursday, Oct. 14 at 2:30 p.m. in federal court.

Reporter

Bryan Manabat studied criminal justice at Northern Marianas College. He covers the community, tourism, business, police and court beats.

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