Posted on: April 14, 2023, 07:51h.
Last updated on: April 14, 2023, 11:27h.
It wasn’t enough that Imperial Pacific International (IPI) damaged Saipan’s casino image and put it in financial ruin. The failed casino operator behind the Imperial Palace resort can also be seen as responsible for the Commonwealth Ports Authority (CPA) losing money.
Media outlet Marianas Variety reported this week that the CPA is taking legal action against two companies for breach of contract. It filed its suit against Phoenix Services Inc. and Pride Keen Limited in the Superior Court of the Commonwealth of Northern Mariana Islands (CNMI) because they haven’t paid their bills.
The two companies were responsible for collectively bringing five yachts to the US-owned territory between 2015 and 2021. The vessels were part of a deal with IPI. But like the operator did on numerous occasions, the companies allegedly quit paying their leases.
CNMI Takes Another Financial Hit
The CPA, according to its website, manages and operates all airports and seaports in the CNMI. Leading it are seven governor-appointed members of a board of directors, with support from the Senate. It receives limited funding from the government, with dock and airport fees providing a large portion of the operational budget.
The CPA asserts that the lack of payments has cost it almost $92K from the missed fees from Phoenix, not including the expense of seeking legal recourse.
Phoenix received the yachts from Pride Keen and signed the lease, making it the prime target of the suit. Pride Keen owns two ships that remain at commercial docks in Saipan through the unpaid lease.
Similar to IPI, Phoenix has blamed its inability to pay on COVID-19. It allegedly stopped making payments on two of the dock spaces in March 2020. The CPA then reworked its agreement with the company to reduce the fees, ultimately agreeing to a 50% reduction.
That agreement included a promissory note from Phoenix to pay all outstanding fees. But the company never fully complied. It paid $10K in two installments in April and July 2021, and then stopped, according to the CPA.
The agency then asked Phoenix to make good on all outstanding debt. But it never did, leading to the current lawsuit.
Phoenix argues that CPA can’t sue it for violating the lease agreement, which was the justification the agency gave, because there isn’t one in place. Lawyers argue that the reworking of the agreement nullified the original contract, and therefore, the CPA has no case.
The battle continues, with the agency standing firm. It wants full payment plus damages and an additional 9% in interest.
IPI Receiver Receives Payment
Clear Management Ltd, the court-appointed receiver overseeing a series of Imperial Palace asset auctions, is finally getting paid. It has inventoried, organized, managed, and administered several auctions over the past several months, but has had to extend itself financially to cover the costs.
A CNMI court judge ordered that all proceeds from the auctions be put into escrow for court approval before being released. Chief Judge Ramona V. Manglona has now given the green light and the funds can start moving.
Clear Management earns 10% of all the revenue the auctions generate, as well as certain fees. As a result, following the completion of the second and third auctions from December to February, the company will receive just over $35K in commissions. It will also receive $43,533 in expenses, according to Marianas Variety.
Related News Articles