Saipan casino operator warned: Renew insurance or face bankruptcy case dismissal

Court sets June 19 deadline amid Imperial Pacific's struggles with cash shortage and delayed assets sale

The Imperial Pacific Resort in Garapan

By Bryan Manabat

Saipan- The U.S. Bankruptcy Court for the Northern Mariana Islands has issued an ultimatum to Imperial Pacific International, warning that its Chapter 11 bankruptcy case could be dismissed or converted to Chapter 7 unless the company immediately addresses critical operational failures.

Judge Robert J. Faris ordered Imperial Pacific to show cause why its case should not be dismissed, citing the company’s failure to renew its recently expired liability insurance policy.

Imperial Pacific has until June 19 to provide proof of coverage.

Imperial Pacific, which operated a casino in Saipan for four years before closing in March 2020 due to the Covid-19 pandemic, filed for Chapter 11 protection in April 2024, citing over $165.8 million in debt. Chapter 11 allows companies to restructure while continuing operations. Meanwhile, Chapter 7 bankruptcy is a legal process where a debtor's assets are sold to pay off creditors.

ADVERTISEMENT

In a court-approved auction on Feb. 26, Team King Investment (CNMI), LLC emerged as the winning bidder for IPI’s casino assets.

Faris approved the sale on April 29 following resolution of objections from creditors. However, the sale has yet to close due to unresolved disputes between Team King and the CNMI government.

According to court filings, Imperial Pacific has little or no cash, has failed to pay security guards for over a month and could not renew its public liability insurance. 

Faris emphasized that the company’s inability to protect the public or pay basic expenses is grounds for immediate dismissal under Section 1112 of the Bankruptcy Code.

“The only realistic prospect of resolving this case is the closing of the court-approved sale,” Faris noted. “But that sale remains stalled.”

The judge also warned that converting the case to Chapter 7 or appointing a trustee would likely be futile, as neither would have the funds to carry out their duties.

“Dismissal, rather than conversion or appointment of a trustee, would be in the best interests of creditors and the estate,” he concluded.

The court will hold a hearing on June 27 to decide on the fate of the case, unless it is dismissed.

At a status hearing on June 13, Team King’s attorney, Louie Yanza, said his client was working to resolve outstanding issues with the Department of Public Lands.

Meanwhile, U.S. Trustee attorney Neil Verbrugge raised concerns about IPI’s lack of funds, unpaid security services, and the ongoing delay in finalizing the asset sale.

Assistant Attorney General Robert Glass Jr., representing the CNMI government, outlined the requirements for transferring the casino lease.

Vince Seman, attorney for Saipan Stevedore Company, requested a valuation of IPI’s assets and compensation for storing 28 containers belonging to IPI. He also asked for permission to remove the containers.

Faris denied IPI attorney Chuck Choi’s request for a 10-day extension to secure insurance, instead imposing a firm one-week deadline from June 13. The court left open the possibility of a renewed request—if IPI can show meaningful progress.

As for IPI’s casino license, the Commonwealth Casino Commission has yet to render a final decision on the revocation of its casino license for failing to pay its annual exclusive casino license fees and regulatory fees totaling $79.63 million. Community members have been calling for the absolute revocation of its license.

Like the casino operator, the CCC is also fighting for its survival after Gov. Arnold Palacios issued an executive order dismantling the regulatory agency and transferring its authority to supervise casino gaming in the CNMI to the Commonwealth Lottery Commission.

At the 24th Legislature opening session, CCC vice chairman Ralph Demapan to the lawmakers to override the governor’s executive order.

Subscribe to

our digital

monthly edition