Imperial Pacific International (IPI) has notified the US federal bankruptcy court that it has reached an agreement with the Committee of Unsecured Creditors to sell its unfinished hotel-casino in Garapan.
According to local media outlet Saipan Tribune, the goal is to sell the hotel by the end of the year.
Last Friday, IPI attorneys filed a motion opposing the Commonwealth of the Northern Mariana Islands’ (CNMI) motion to convert IPI’s Chapter 11 Bankruptcy to Chapter 7 Bankruptcy, which would involve liquidating all of IPI’s assets.
IPI’s lawyers contend that converting to Chapter 7 liquidation would not serve creditors’ interests. They argue first that liquidations are typically more expensive and time-consuming.
Additionally, they note that Chapter 7 Trustees often lack funds to adequately maintain and secure assets. Given the building’s poor condition and insufficient security funds, they suggest a Chapter 7 Trustee might opt to abandon the asset altogether.
Earlier, the Commonwealth filed a motion to convert the case from Chapter 11 to Chapter 7, citing ongoing losses, lack of prospects for rehabilitation, and absence of insurance. The Office of the US Trustee supported the motion and has requested dismissal of the case.
IPI operated a casino for about four years until the Covid-19 pandemic forced its closure in March 2020. Hotel construction also halted due to a lack of funds. The estimated cost to complete the hotel ranges from $100 million to $150 million.
Although IPI is currently not operating, it employs around 15 people, 10 of whom provide security services.
