IPI Sells Gaming Equipment To Cover The Debt

Article by : Helen Oct 29, 2020

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Imperial Pacific International has been referenced in news articles many times during the last couple of years. It was pretty obvious that the Chinese investment holding company was having trouble taking care of its obligations and responsibilities. Far not once it had to defend itself in court in front of different companies, including the operators of the Commonwealth of the Northern Mariana Islands (CNMI). The casino operator claimed it was suffering from the temporary coronavirus-related occasions that led to the closure of its venue.

The company’s bad streak started when the Federal Court ordered it to pay almost US$6 million to Pacific Rim Land Development, LLC – one of its former contractors that has contributed much towards the expansion of the Imperial Palace casino resort in Saipan. This happened because IPI failed to pay for the services that were provided by Pacific Rim at the official site of Imperial Palace‧Saipan. Though IPI appeals the court’s order, claiming that Pacific Rim overestimates the cost of its services, it has to deal with the debt somehow. It seems the company found the way out – IPI proposes to be able to ask one of its investors to cover the debt. They did manage to find someone willing to invest US$6 million, which could be enough to secure the great debt owed to Pacific Rim.

The money will be placed into a safe account of the CNMI bank and will stay there until they are transferred to Pacific Rim to cover the debt or returned to the investor, depending on the outcome of the IPI’s proposal.

Pacific Rim, in turn, doesn’t seem to be satisfied with the IPI’s decision. Instead, Pacific Rim wants to sell some of the IPI’s assets, including its slot machines and vehicles. According to the official estimates, the company’s gaming equipment is worth around US$20 million, while the vehicles have a value of almost US$6 million. However, Michael Dotts, IPI lawyer, states that the gaming equipment will be sold for only US$2 million in the best-case scenario. “The gaming equipment is carried on Imperial Pacific International Holdings Limited’s audited books at a value of more than $20 million, but the best estimate is that it will sell for $2 million”. The point is that no one but exclusively IPI has all the rights to own the gaming equipment on Saipan, which is why it should be sent away after being sold. When reopening, IPI will have to buy its equipment back again. More than that, by that time, many of the vehicles that Pacific Rim plans to sell will need to be replaced. This will definitely place an unnecessary burden on IPI in both logistical and financial terms. Not to mention, selling all of the IPI’s equipment and vehicles will only leave the company short on its debt but won’t fully cover it.

All in all, IPI is used to dancing around its responsibilities and obligations for the last couple of years. Even though the Commonwealth Casino Commission (CCC) drew a line in the sand, IPI crossed it and made CCC draw a new one, which will likely be shifted again. This is probably because the CNMI wants IPI to “take care of their duties and responsibilities for the Commonwealth, like every other company and industry.”