Embattled casino operator Imperial Pacific International (IPI) has warned it will have to permanently close its Saipan resort, Imperial Palace‧Saipan, due to lack of finances if it is forced to pay a recent US$5.65 million judgement against it to former contractor, Pacific Rim.
IPI filed an appeal to the US Court of Appeals for the Ninth Circuit in late April after the Federal Court found it had breached a promissory note for work done at Imperial Palace‧Saipan worth US$5.65 million. IPI believes Pacific Rim had overstated the cost of that work.
On Friday, IPI’s counsel filed a motion with the US District Court for the Northern Mariana Islands asking to suspend proceedings pending resolution of its appeal and warning the company may be forced to shutdown if forced to pay in the meantime.
“If the judgment becomes enforceable while the appeal is pending, IPI will be unable to pay it, and will likely have to close permanently,” the Saipan Tribune quoted counsel as saying.
IPI’s precarious financial state has become increasingly apparent in recent times, none more so than last Tuesday when the Commonwealth Utilities Corp cut off the power to both Imperial Palace‧Saipan and the company’s head office for failure to pay its bills. As of Sunday, power had yet to be reinstated.
IPI was also 15 days late in paying the full balance of its annual US$15 million casino license fee last September.
The Saipan Tribune revealed overnight that IPI has still only partially paid its two most recent payrolls and is in danger of missing the next payroll due to lack of funds.
“Failing to stay proceedings will only exacerbate IPI’s current financial distress,” counsel said on Friday, noting that paying the wages of IPI’s 1,066 employees was dependent on the decision.
“It will not just put IPI at risk of further financial distress, it will also put the people of Saipan at risk of layoffs, empty pockets, lack of food and shelter, and increased crime and violence.”
IPI last month reported a loss of HK$3.94 billion (US$508 million) in 2019, with revenue plummeting 83.4% to just HK$539 million (US$69.5 million).