A creditor of Saipan’s Imperial Pacific International (CNMI) LLC has claimed interest in purchasing the company’s shuttered casino, Imperial Palace Saipan, from a mystery US investor and called on a live biddng process to be implemented with a starting price of US$10.3 million.
According to a report by The Saipan Tribune, the investor was mentioned by Michael Dotts of IPI creditor Dotts Law Office earlier this week while opposing a sake process put forward by IPI.
In an opposition motion, Dotts claimed to have been in contact with a potential investor but said more time was needed to allow for proper due diligence.
“A proper procedure needs to be put in place so that other investors can obtain due diligence material,” Dotts said as per The Saipan Tribune’s report.
“[IPI] is in possession and control of material needed for potential purchasers to consider the investment. These materials include blueprints, construction inspection reports, permits, constructions contracts, and estimates of what it will cost to complete the building.
“A ‘bid package’ should be assembled by [IPI]. The potential bidder from the United States has advised that bid packages are generally provided when properties are sold in bankruptcies. The time for investors to consider bidding should only start to run when they are provided with the bid package. Further, investors should either be provided time to have their own architects and engineers inspect the building, or a neutral architect or engineer should provide a report on the condition of the building.
“The preferred approach would be for [IPI] to fund hiring the expert using the DIP financing. Providing such a report with the bid package may increase the interest in the purchase of the property and result in a higher sales price.”
Dotts also called for a blind bidding procedure starting at US$10.3 million and offering US$100,000 increments for each new bid.
“Otherwise, the stalking horse gets the property for US$10 million,” he said. “The Dotts Law Office proposes that 90 days after the bid package is made available to investors, sealed bids be submitted. This will encourage the stalking horse bidder to make a higher bid to fend off potential other bidders.
“If one or more bids are received, and if there is a substantial difference in price, the property can be sold to the highest bidder. However, if more than one bid is received, and if the prices are roughly equivalent, a bid committee can consider other factors, such as the ability of the bidders to actually complete construction of the project.
“It is in the best interest of the CNMI and of all creditors who reside here that not only the highest price is obtained for the property, but that the purchaser actually completes the project.”
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