With just two years left before exhausting all of the NMI Retirement Fund's assets, the U.S. District Court should already appoint a federal equity receiver to take over the NMI Retirement Fund, according to retiree Betty Johnson.
Johnson, through lawyers Robert Hatch, Bruce L. Jorgensen, and Stephen C. Woodruff, said there are no Commonwealth institutions that have the power or inclination to do anything to prevent the Fund's imminent collapse.
The receiver can play the traditional role of marshalling assets and reorganizing the Fund for the benefit of its beneficiaries with the power of the federal court behind it, said the lawyers.
This was their response to the Fund's and the CNMI government's opposition to Johnson's motion for the appointment of a receiver.
Johnson's counsels said the appointment of a federal receiver is the only available remedy to “preserve the property.for those ultimately entitled to receive them,” because bankruptcy is not available.
In fact, the lawyers pointed out, the Fund's attempt to file a Chapter 11 bankruptcy case is essentially an admission that a federal receivership is warranted because only a federal receivership can achieve the same purposes.
They said a receiver can continue to pursue the Superior Court action (Fund's lawsuit against the government), which is a traditional and well-established role for a receiver.
Thus, the lawyers said, the appointment of receiver will not “enjoin” the Superior Court action and will not impair any ability it might have to enforce its judgment.
They asserted that a receiver needs to be appointed to avoid any future discrepancy as to whether the trustee ad litem can actually take necessary action to prevent irreparable harm.
The Fund and the CNMI government argue that the trustee ad litem can serve the same purpose as a receiver.
Fund counsel Braddock Huesman said a receiver will not force the Legislature to appropriate funding; it will not provide the Fund with board members; and it will not stop the government from implementing a takeover by executive fiat.
“Thus, a receivership is not warranted because Ms. Johnson has no claim that a receiver will protect her interests,” Huesman said.
Johnson is suing Gov. Benigno R. Fitial, Fund trustees Adelina C. Roberto and Nacrina Barcinas, former Fund administrator Richard S. Villagomez, Finance Secretary Larissa Larson, the CNMI government, Finance, Fund, and the Fund board for breach of contract, violation of the U.S. and CNMI constitutions, violation of due process, deprivation of rights, breach of fiduciary duty, and unjust enrichment.