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4/30/2025—CNMI designated bankruptcy judge Robert J. Faris has approved the sale of Imperial Pacific International (CNMI) LLC's casino properties to Team King Investments, marking a major milestone in the Chapter 11 bankruptcy case even as CNMI officials pledge to continue monitoring the situation.
The ruling, issued last Tuesday, April 29, at the U.S. District Court of the NMI, authorizes the asset sale and related stipulations after more than a year of proceedings to resolve the Saipan casino’s extensive debt obligations.
Faris presided over the Chapter 11 bankruptcy hearing, with appearances from attorneys representing Hong Kong-based IPI, Team King, the creditor committees, secured creditors, and government agencies in the CNMI.
He approved the sale, describing it as "not the best, but the least bad outcome" under the challenging circumstances.
Chief Solicitor Robert Glass, appearing for the Office of the Attorney General, said the sale marks an important step for the Commonwealth.
"This case has been challenging, but the sale ensures at least partial recovery for the Commonwealth and creditors," Glass, in an interview outside the district court, said the sale to Team King Investments was a compromise.
“A lot of the big parties worked out an agreement that we thought was best for each of the parties to make sure that everybody at least got something. No one's going to be made whole. You know, that's just not possible. It's not possible when you only have $13 million to go around for $162 million worth of claims.”
At the end of the day, he said he’s happy with the decision.
“I think Judge Farris really considered, you know, the situation we're in right now. The debtor owes a lot of money. It's [over] $162 million in debt. The sale only brought in around $13 million, so clearly there's not enough money to go around for everyone. And so, we're working on that. We're hopeful with Team King that the winning bidder will, you know, come in here and finish the building, get everything done, and actually live up to the expectations and to the agreements that it makes.”
He also said OAG gave the deal a go-signal despite earlier reservations relating to a Team King official also being part of the IPI ownership group.
“One of the objections we had is that it seemed like Team King had some insiders on there. And so, you know, part of the resolution is us withdrawing those objections to get the sale through. That doesn't necessarily mean that everything's going to go through and everything's going to be smooth, but that was part of it. We still have those concerns. Those concerns don't go away, and they will certainly be under scrutiny as DPL looks into the lease and as the CCC will look into the casino license. We hope that all the due diligence will be done, and again, we'll have a really good actor here in the future,” he said.
Meanwhile, Commonwealth Casino Commission chair Edward DeLeon Guerrero said the CCC would review the court's stipulation and supporting documents before issuing formal comments on regulatory matters.
“The federal court accepted the bid, and the order will come out in two days. I'm going to read and review the stipulation before we make comments. I'm going to see the stipulation first [before making any comments],” he said in an interview, also outside the district court in Gualo Rai.
The CCC has a regularly scheduled meeting today, April 30, where the sale's implications may be discussed.
During the bankruptcy hearing, IPI counsel for Chuck Choi said the sale offered the best available resolution given IPI's financial situation.
"Approval of this sale provides a potential upside if the casino license is assumed and assigned within the 270-day window," he said.
Choi informed the court that Team King intends to close the sale "as quickly as possible."
Attorney Chris KS Wong, representing the official creditors' committee, warned that without the sale, the estate risked administrative insolvency.
"This is the best opportunity for unsecured creditors to recover in this case," Wong said.
According to federal court documents, IPI and the official committee of general unsecured creditors selected Team King Investment's $12.95-million bid during a Feb. 26, 2025, auction to liquidate IPI's casino property.
In a Feb. 27, 2025, filing, IPI and the creditors' committee also named Loi Lam Sit's $12.5-million bid as the back-up offer.
Both bids included an option to purchase IPI's casino license and assume certain liabilities tied to the Hong Kong-based casino operator.
Assets auctioned include the hotel building under construction with a casino in downtown Garapan, a leasehold interest in approximately 19,204 square meters of land leased from DPL under Lease Agreement No. LA-15-002S, and ownership interest in Imperial Pacific Properties, LLC, which holds leasehold rights to eight adjacent lots.
Industry estimates suggest completing the Garapan casino structure would require an additional investment of about $150 million.
In an earlier interview, Gov. Arnold I. Palacios said he wished the casino property had commanded a higher sale price. "I wish it was $25 million," Palacios said, noting that the OAG is closely monitoring developments to ensure the sale and related outcomes serve the CNMI's best interests.
IPI filed for Chapter 11 bankruptcy protection on April 19, 2024, citing debts of over $165.8 million.
Among its largest unsecured creditors are the CNMI Treasury, $62 million (casino license fees); MCC International, $34.9 million (construction services); CCC, $17.6 million (licensing fees and penalties); Hughes Hubbard & Reed LLP, $8.58 million (legal services); Century Estate Investment Ltd., $8 million (loan); CNMI Division of Revenue and Taxation, $7.9 million (taxes); Joshua Gray, $5.68 million (default judgment); Internal Revenue Service, $4 million (federal tax debts); U.S. Department of Labor, $950,000 (wage violations); and U.S. Department of Justice, $1.46 million (civil penalties).
The sale covers IPI's tangible property, machinery, equipment, software, intellectual property, and related assets.
Ahead of the sale's approval, the CNMI government filed objections citing concerns over Team King's ownership structure.
DeLeon Guerrero earlier acknowledged the concern, stating: "Part of the objections is that there is an insider. If you look at the board of Team King, one of the board members is also in the board of Hong Kong IPI."
He added that if a company is otherwise suitable for licensing but one director is found unsuitable, the CCC could require that director's removal as a condition for licensing.
Faris scheduled a status hearing for June 13, 2025, to review closing progress, including the removal of IPI's stored assets.
Story by Mark Rabago
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