LOI Lam Sit has agreed to lend Imperial Pacific International another $1 million to pay for, among other things, fees and operating expenses. Court documents obtained by Variety did not provide any other information about Sit.
The federal court, on May 30, granted an interim motion, authorizing IPI to obtain an initial advance of $400,000 from Sit in a debtor-in-possession financing proposal or DIP.
IPI said it has also secured the remaining $6.6 million of the $7 million loan.
On Friday, attorney Joey San Nicolas, who represents Sit, informed Chief Judge Ramona V. Manglona of the District Court for the NMI that he had discussed with his client the terms of the loan on June 19 through WhatsApp.
San Nicolas said his client does not oppose an additional $1 million loan as suggested by the debtor, IPI.
Moreover, San Nicolas said his client is prepared to file a supplemental declaration identifying himself and provide biodata.
IPI, through attorney Chuck Choi, made an oral amendment regarding the DIP loan and requested an additional $1 million on the same terms the court previously approved in its interim order.
As for the CNMI government’s statement that IPI has failed to maintain an appropriate fire and damage insurance and general liability insurance as required by its Lease Agreement LA 15-002S with the CNMI government, Choi said the DIP financing of $400,000 was just received this week.
IPI representative Howyo Chi, for his part, provided the court with an update as to the certificate of insurance.
Judge Manglona accepted IPI’s proposal for the purpose of the insurance, saying that there is good faith effort, and that IPI will be able to produce the certificate of insurance.
The judge ordered Chi to make a payment to the Department of Public Lands in the amount of $207,000.
Noting the objections from some of the parties, the judge also granted an amended motion for a second interim order authorizing a DIP loan of up to $150,000 for financing through the month of June 2024.
IPI filed for Chapter 11 bankruptcy in the District Court for the NMI on April 19, saying it owes creditors over $165.8 million.
Chapter 11 bankruptcy allows a business corporation to restructure its debts and continue operating.
Among the IPI creditors with the largest unsecured claims were the CNMI Treasury with $62 million for casino license fees; MCC International, $34.9 million for construction services; Commonwealth Casino Commission, $17.6 million for licensing fees and penalties; the law offices of Hughes Hubbard & Reed, $8.58 million for legal fees; Century Estate Investment Ltd., $8 million for an unpaid loan; CNMI Division of Revenue and Taxation, $7.9 million for unpaid business gross revenue tax; and Joshua Gray, $5.68 million for default judgment.
IPI also owes money to the Internal Revenue Service in the amount of $4 million; the U.S. Department of Labor-Wage and Hour Division, $950,000; and the U.S. Department of Justice-Civil Division, $1.46 million — labeled as “contingent disputed.”
For its part, the CNMI government, represented by Chief Solicitor J. Robert Glass Jr., has requested the federal bankruptcy court to convert IPI’s Chapter 11 petition to Chapter 7.
Under the U.S. Bankruptcy Code, Chapter 7 provides for the liquidation of a debtor’s property and distribution of proceeds to creditors.
