The unsecured creditors of Imperial Pacific International continue opposed to the bid price for the sale of the casino property, filing an opposition to IPI’s motion to approve the bid price of $10 million.
According to the Saipan Tribune, the committee of IPI creditors feel that the bid is too low and works in favor of proposed purchaser Loi Lam Sit.
Earlier this month, the CNMI government indicated its similar opposition to the asset sale, citing creditors’ interests.
This prompted IPI to bring its bankruptcy agreement to the district court to approve the bid procedure for the sale.
This was partially due to Loi Lam Sit initially proposing a $7 million loan to finance the bankruptcy proceedings, while only providing around $1.5 million for the liquidation. Loi Lam Sit is defined as a “friend of the debtor”.
The committee of creditors, via its attorneys have claimed that Sit has “dubious connections to the debtor and its principals”.
They further that “the proposed bid procedures unfairly favor Mr. Sit, without ever requiring him to demonstrate his ability to satisfy the leasehold obligations, his wherewithal to operate a hotel, or his connections to the debtor”.
One of the creditors’ attorneys furthered that “The only viable outcome, therefore, is the sale of the debtor’s assets through a strategic marketing process to bring it to an operating casino and hotel, ensuring not only the highest possible recovery for the creditors but also securing the tax revenue, tourism, and job creation that it would bring to Saipan”.
In particular focus is the casino license itself, which the Commonwealth Casino Committee (CCC) has indicated would not be reinstated to the debtor or connected parties. The CCC has, however, indicated that it could grant a casino license to disinterested bidders.
“By excluding the casino license from the scope of ‘acquired assets,’ the proposed bid procedures fail to capture the cumulative value of the assets as a casino hotel and dissuades potential buyers in the gaming/gambling industry from ever submitting a bid. Instead, the debtor proposes bid procedures which have been narrowly tailored to serve the interests of Mr. Sit, who does not qualify to operate a casino,” indicated the creditors’ attorney.
The Northern Mariana Islands bankruptcy court is set to hear oppositions on September 19th.
