Imperial Pacific Is Given 30 Days to Pay Off Its Debts; Otherwise, Its Assets Will Be Sold Off

Article by : Helen Feb 3, 2021

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It looks like the U.S. District Court for the Northern Mariana Islands is sick and tired of Imperial Pacific International’s excuses that it has no money to pay off its debts to its former construction workers. The court’s Chief Judge Ramona Manglona’s most recent ruling in the matter is essentially an ultimatum for the company: either it finds the funds to repay what it owes to the workers (following previous court rulings), or its assets will be forcibly sold off to cover the debt.

Imperial Pacific now has 30 days to find $1.2 million it owes. If the company fails to do so, the judge will appoint a receiver to “gather and auction off” Imperial Pacific’s assets to follow through on its obligation to repay the debt.

In addition to the ultimatum, the stop-work order was extended for construction workers only, with the rest of the employees now being allowed to go back to work. Judge Manglona called the stop-work order “a good incentive” that has proven its efficiency.

Following the initial stop-work order, Imperial Pacific managed to find $233,000 and transferred the money to the U.S. Department of Labor. Only $36,000 out of this payment was meant for the workers. As for the rest ($197,000), the U.S. Department of Labor representative told the court, “We believe $197,000 was in civil money penalties, so the department is going to apply that amount to the wages due under the consent judgment, which will bring the current amount due to $1.2 million.”

Imperial Pacific’s attorney, Michael Dotts, told the court that $400,000 more to repay the debt had been sent from Hong Kong to IPI via a wire transfer.

IPI’s board chair, Cui Li Jie, has chosen an interesting communication strategy for this debacle. The day before the court’s ultimatum ruling, her lawyer went on record during a hearing saying she “did not fully understand the specifics of the consent judgment that IPI violated or her role as company chairperson.” Well, this argument wasn’t convincing enough for the judge.

The ongoing legal standoff started with Imperial Pacific not paying its workers wages dating back to 2016 and 2017. In April 2019, IPI, its parent company Imperial Pacific International Holdings, and Cui Li Jie signed a consent judgment, which meant the company agreed to pay off the debt. Yet, the money was never transferred, so the court found both entities and Cui personally in contempt.

Besides that, all three were found in contempt for violating the Fair Labor Standards Act as they failed to pay their employees on time in 2020 and made the company-owned housing for its workers uninhabitable by not providing power and water.

And this scandal is hardly the only one that has put the Imperial Pacific in the negative spotlight throughout the years. Scheduled for completion on February 28, 2021, the company’s flagship project in Garapan, Imperial Pacific Resort, has only the first phase of the works out of four completed as of now. The second phase is underway, while the site development is now projected to be at the end of the next year – almost two years later than the current deadline.

Failing to finish the construction on time, i.e., by the date specified in the casino license agreement, will be considered a breach of contract. That is unless the Office of the Governor satisfies a formal request to extend the deadline – but the IPI hasn’t filed one yet.