IPI agrees to pay $24M in 2024

The Commonwealth Casino Commission board granted yesterday afternoon CCC executive director Andrew Yeom’s request for an additional 10 business days to pursue a settlement agreement with Imperial Pacific International (CNMI) LLC.

With no objection from the commissioners, CCC board vice chair Rafael S. Demapan gave Yeom until April 22, 2024 at 10am to complete the final details of the deal.

Demapan said hopefully this will be the last request as whether a stipulated settlement agreement is signed by the Office of Attorney General or not, they are going to proceed whether to revoke or not IPI’s exclusive gaming license.

Asked by Demapan what really transpired during the negotiations with IPI, Yeom said this settlement if it does occur would definitely have significant impact on the board’s decision.

Yeom said under their draft stipulation agreement, IPI will pay a total of $24 million in 2024.

He said IPI shall pay $3.1 million for the 2020 regulatory fee by April 22, 2024.

Aside from paying the 2020 regulatory fee, IPI agrees to pay $6.8 million as the discounted arrears of 2021 regulatory fee, 2022 regulatory fee, and 2023 regulatory fee, along with $2 million discounted penalty, or for a total of $8.8 million as stipulated arrears in accordance with a payment plan.

Separate from the stipulated arrears, IPI agrees to pay $1.1 million on Oct. 1, 2024 for the 2024 regulatory fee as they come due in October 2024, provided that if the law is unchanged, then the $2 million in balance be deferred though Aug. 30, 2039.

IPI agrees to pay the 2020 license fee in the amount of $15.5 million on July 18, 2024, and $5.5 million for the 2024 license fee in advance by July 15, 2024 for the payment that will be due on Aug. 12, 2024, provided that if the law remains unchanged, then the $10 million in balance be deferred through April 30, 2039.

Yeom said IPI agreed they will not challenge the CNMI Legislature or the government to amend the gaming statute to allow multiple casino licenses.

He said IPI also would immediately dismiss the current lawsuits against the CCC and Gov. Arnold I. Palacios with prejudice.

Yeom said IPI will also forfeit their license without challenging the status quo in case of any default in the terms of the settlement agreement.

He said IPI will forfeit voluntarily all their right to appeal to the Superior Court.

“That is how good of a deal this is,” Yeom pointed out.

Yeom said assistant attorney general Alison Nelson has been with him all the way and in fact she’s the one who drafted this proposed settlement agreement.

Yeom said it is safe to say that he worked under the guidance of the OAG until another attorney from OAG came and told him something is conflicting.

The director identified the OAG attorney as assistant attorney general Robert Glass.

Glass came in to watch the special meeting shortly after Yeom just mentioned his name.

“And that’s when I found out there are certain things may not be, you know, legally sufficient or insufficient,” he said.

Yeom said he had to kind of stop the negotiations because Glass was talking about not recommending the proposed stipulated settlement agreement to Attorney General Edward Manibusan as it’s not legally sufficient.

“This is about 90% done! We still need some more to go and we were working on that. But that’s when the discussion was interrupted when the other assistant AG appeared to tell him that it may not be legally sufficient.

“So that’s where that’s where things have stalled,” Yeom said.

Commissioner Ramon Dela Cruz said it appears to him that there must be confusion within the OAG and that he stands to be corrected if none.

Dela Cruz said they have three assistant attorneys general assigned to CCC, then Glass came into the picture.

“It appears to be a lot of moving parts here coming from the Attorney General’s Office,” the commissioner said.

Nelson said Glass has been representing the Commonwealth in litigation that has been filed against the Commonwealth relating to these proceedings and so he has been representing the attorney general’s interests now and in reviewing whether this is sufficient for formal legal submissions.

Before the voting to the motion to approve Yeom’s request for additional 10 days, Demapan asked IPI director/manager Howyo Chi to speak about the 10% remaining unresolved in the stipulated settlement agreement.

Chi said he feels like they’re very close in coming to a settlement agreement with Yeom, but that obviously there are some language that needs to be worked on.

Chi said Yeom also likes to add bankruptcy protections and that they (IPI) also have consulted their bankruptcy attorney as well.

Chi said so definitely they need time to discuss.

“I’m not an attorney so I’m not sure exactly the legal words or the terminology to use there, which is why we need an attorney,” said the IPI director, adding that they are anticipating their bankruptcy lawyer flying in from Hawaii.

Chi they have contracted an attorney specifically to deal only for bankruptcy.

He said they are still not 100% sure if they’re going to file for bankruptcy, but just preparing for it.

He said it’s not necessarily Chapter 7 bankruptcy total liquidation where they just sell everything and get out of here.

Chi said their bankruptcy attorney is more than willing to discuss it with the CCC, OAG, even as far as with Palacios if he wants to entertain a meeting to just to get an understanding of what IPI and Yeom are facing here and what are the some of the potential outcomes that could come out of it.

Chi said part of that 10% has to do with bankruptcy as it’s the recently added term in the proposed settlement agreement.

He said Yeom added that bankruptcy is to protect the CCC as the Commonwealth wants to make sure that even if IPI defaults that there’s a lien on IPI’s property.

“It’s something new to us,” Chi said, adding that they also need to make sure that the stipulated settlement agreement is legally sufficient which is why it requires attorneys to be in these negotiations.

“This is basically our last-ditch effort to make this work,” Chi said.

He said they don’t want to continue to litigate that is why they can agree to something that there’s no turning back.

“If IPI for some reason defaulted on any of those terms, there’s no turning back. It’s gone forever,” Chi said.

The IPI director said if they can get somebody from the OAG to talk with them along the way, it will speed up the process.

“This is something that we can do instead of the last minute about the settlement table and they say ‘oh this is not legally sufficient.’ We need to stop this. We were just working for nothing,” Chi said.

Chi said their counsel, Michael Chen, has been with them either on phone calls or WhatsApp in the entire negotiations.

Demapan said he understands that the hearing is for revocation, however, they also want at the same time to be informed by getting as much information so that they have a decision.

Dela Cruz offered the motion to grant Yeom’s request for additional 10 days so that they can try one last time to see what they can to move forward with revocation or stipulated settlement.

Demapan said a motion has been offered to allow the additional 10 days for Yeom to come out with a product whether it is signed by the OAG or not.