Imperial Pacific International (IPI) is holding on tight to its casino exclusivity in Saipan, despite the non-operational status of its Imperial Palace casino. But amidst the struggle, a glimmer of hope emerges as it manages to pay off a massive bill, though it remains deep in debt.
A huge breather
Last week, a judge granted approval for money transfer from a trust account to USA Fanter, a construction contractor owed over $2 million by Imperial Pacific International. The transaction of $251,581 marked the end of a longstanding legal dispute between the two parties.
The dispute traces back more than three years, with USA Fanter relentlessly attempting to collect its dues from IPI. With continuous refusal to pay up, the construction company resorted to legal action against the embattled casino operator in 2019.
Eventually, the court ruled in favor of USA Fanter, ordering Imperial Pacific International to settle the debt. However, the company failed to comply, leading to its receivership. Subsequently, a series of asset auctions stripped Imperial Palace of its former grandeur, leaving it but a shadow of its past glory.
Though one battle is won, the war rages on! While appealing the USA Fanter case, Imperial Pacific International had to deposit $2.45 million into a trust. Last month, the two parties reached a settlement, effectively reducing the debt substantially.
Thus, the recent payment of $251,581 concludes “all claims by USA Fanter,” as stated in the settlement agreement.
Problems stack against Imperial Pacific International
Yet, more lawsuits have dragged Imperial Pacific International further into financial woes, with additional creditors hoping to recover their losses through the receivership. Among them is Joshua Gray, a former executive who won a $5-million discrimination lawsuit a couple of months ago, with his outstanding debt still unresolved.
In addition to these challenges, IPI is grappling with owing millions to the Commonwealth of Northern Mariana Islands and the Commonwealth Casino Commission (CCC). Though USA Fanter can now breathe easier, the rest, whether part of the receivership or not, remain in anticipation of their dues.
Meanwhile, the prospects of Imperial Palace’s reopening grow dimmer, leading to further deterioration of the property. This decline has already claimed vehicles and may eventually affect the resort’s buildings, posing a hurdle to welcoming visitors.
IPI battle shows a huge fight for license
In a desperate fight to retain its license exclusivity, IPI recently engaged in arbitration with the CCC. Beyond IPI’s willingness to violate laws and contracts, the core issue revolves around whether it should maintain its exclusivity.
The US Court of Appeals for the Ninth Circuit already ruled against IPI’s legal basis for exclusivity, given its breaches of contractual terms. Consequently, this could jeopardize all existing agreements.
While the arbitration sought advice and is non-binding, the CCC now holds legal grounds to revoke IPI’s exclusivity if deemed necessary. The decision may not be immediate, as the regulator plans to discuss the next steps later this year.
Amidst these complexities, IPI remains indebted to the CCC and the CNMI government, with unpaid license fees and obligations amounting to at least $36.6 million. As IPI grapples to stay afloat, the mounting debts pose a daunting challenge to its financial viability.
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