Kan Pacific wants to drop its suit against IPI

Kan Pacific Saipan, Ltd., which is suing Imperial Pacific International (CNMI) LLC for breach of contract, has asked the Superior Court to dismiss its complaint.

On Monday, Kan Pacific, through its lawyer, Joseph Iacopino, filed a proposal to dismiss its complaint against IPI without prejudice, meaning the suit can be filed again on the same grounds.

Superior Court Associate Judge Wesley Bogdan granted the proposal yesterday.

Back in May, IPI filed a memorandum supporting the motion to dismiss the lawsuit because they believe the suit requires the Department of Public Lands to be involved because the government agency is a significant third-party beneficiary in the dispute.

According to court documents, Kan Pacific first signed a 40-year lease for 146 hectares of land from DPL on Dec. 15, 1977, and signed the lease again on Dec. 16, 1977. That lease was revised to include a provision that requires DPL’s consent or approval for any transfer of property rights or subleases Kan Pacific wishes to do with the land.

Then, around October-December 2015, negotiations between Kan Pacific and IPI were reported in various media platforms. Soon after, news articles were published alleging that a deal had been “signed.”

The memorandum stated that during this time negotiations were simply to ensure that IPI was in the best possible position to secure the next lease from DPL, and the “deal” was an agreement between Kan Pacific and IPI to transfer the lease to IPI.

Soon after, Saipan Entertainment filed a lawsuit contesting the legality of the “deal,” alleging that DPL did not consent to the negotiations. The aforementioned “deal” was then nullified.

A new agreement between Kan Pacific and IPI in 2016 was reached. The agreement essentially transferred all assets and operations from Kan Pacific to IPI and required Kan Pacific to encourage present employees to join IPI.

Pursuant to the agreement IPI was to make a $17.5-million payment to Kan Pacific, with an initial payment of $12.5 million and the remaining to be paid in instalments of $200,000 per year for the next 25 years, beginning June 2017.

The new agreement also ordered a $16-million payment from Kan Pacific to DPL, which now made DPL a significant third-party beneficiary to the 2016 agreement.

IPI eventually did not win their bid for DPL’s new lease of the land, as IPI was unable to meet the requirements imposed by DPL. After three annual payments from IPI to Kan Pacific, IPI did not make a payment in 2020, which resulted in the breach of contract lawsuit.