Embattled Saipan casino operator Imperial Pacific International (CNMI) LLC owes the CNMI government more than US$87.5 million, lawyers have revealed.
According to details contained in a motion filed by the CNMI government last Thursday, IPI owes a total of $165.8 million to creditors of which around US$87.6 million or 52.8% of the total is owed to the government itself. This represents US$62.0 million in unpaid annual license fees, US$17.6 million for non-payment of casino regulatory fees plus almost US$8.0 million more for non-payment of taxes, including penalties and interest, Marianas Variety reported.
The motion was filed by the CNMI government to request IPI’s recent Chapter 11 bankruptcy petition be converted to Chapter 7. Under the US Bankruptcy Code, Chapter 11 bankruptcy allows a business or individual to reorganize and restructure, while Chapter 7 allows for liquidation of the debtor’s property and distribution of proceeds to creditors, potentially resulting in dissolution.
In filing its motion, the government’s representative, Attorney General Chief Solicitor Robert Glass Jr, said IPI has no ability to pay either past or upcoming debts due to the closure of its casino in 2020.
“It has no income and is unable to pay post-petition obligations that continue to accrue — like its rent due April 28, 2024, that has not yet been paid, and the pending Annual Casino License Fee that will be due August 12, 2024,” Glass said, as per Marianas Variety.
“[IPI] has no ability to generate revenue; its hotel building is unfinished and has never been operational. In addition, [IPI] has no ability to operate as a casino; its casino gaming license is currently suspended and, until they were stayed by the filing of this case, two proceedings seeking revocation of the license were pending due to [IPI’s] failure to pay significant fees to the [Commonwealth Casino] Commission and for its failure to comply with an order of the Commission requiring a payroll reserve. Other complaints have also been filed by the Executive Director that also seek revocation of [IPI’s] casino license.
“Overall, based on the public information available, the Debtor does not have the financial wherewithal to successfully proceed under Chapter 11 of the Bankruptcy Code.”
IPI filed for Chapter 11 bankruptcy in April in an effort to delay casino license revocation hearings.
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