Clear Management asks bankruptcy court to OK sale of IPI vehicles

Court-appointed receiver Clear Management Ltd. has filed a motion requesting the NMI bankruptcy court to allow the sale of Imperial Pacific International (CNMI) LLC’s vehicles despite IPI’s assets being tied up in an ongoing bankruptcy proceeding.

Last Friday, Clear Management, through attorney Michael White, filed a motion for an order approving report and accounting. The motion essentially asks the NMI bankruptcy court to approve the sale of IPI’s vehicles despite the pending bankruptcy proceedings as these vehicles had been sold in an auction prior to IPI filing for bankruptcy.

According to the motion, on April 11, Clear Management conducted an auction of IPI vehicles. Eleven vehicles were sold to eight different bidders for a total of $429,500. Of this sum, $233,750 was paid, and is contained in an escrow trust account.

On April 19, IPI filed a petition under Chapter 11 of the Bankruptcy Code.

“The petition was filed before two of the winning bidders had paid for three of the vehicles. For this reason. Clear did not file an accounting of the sale, or a motion asking the Court to approve it, intending to do so after the payments in question were made,” said White.

White noted that the vehicles are without original documentation and none of the vehicles are in Clear’s physical possession as all of the vehicles are still located on IPI’s property.

“Clear has no original title documents. It has only photocopies of title documents, which were provided to Clear by [IPI]. Since these photocopies were given to Clear, Clear believes that they are not the debtor’s property. Clear is also holding a number of annual vehicle registration documents, which were located inside the vehicles. These were removed from the vehicles so that Clear could attempt to verify ownership of the vehicles. Most of the vehicle registrations have expired,” said White.

White argues that the $233,750 paid for the 8 sold vehicles do not belong to IPI.

“Since the vehicles remain the property of the debtor, and the court has not approved their sale, it is plain that the $233,750 paid for the eight sold vehicles is not and never was the property of [IPI]. Clear proposes that the court approve the sale contracts that have been signed and permit Clear to finalize the sales with the other successful bidders, and authorize Clear to retain its commission and expenses out of the proceeds,” said White.

White says if the court does not approve the sale of the vehicles, in due course, Clear will submit a motion for the payment of reasonable compensation for the services which it has rendered, and for costs and expenses incurred by it to be paid by IPI.

White says as for all prior sales of IPI’s property that been reported to and approved by the court, the property sold is no longer the property of IPI and most of the proceeds of the sales have been distributed pursuant to court orders.

However, there remains $56,867.20 in the escrow account from prior auctions which Clear says remains subject to distribution by the court.

“The sum of $56,867.20, realized from the sale of [IPI] gaming equipment, remains in the undersigned’s Escrow Trust Account. This figure does not take into account the unpaid commission of $4,175 to which Clear is entitled. Clear believes that the proceeds of the sale of gaming equipment are not the property of [IPI], because the sales were approved by the court. The proceeds are held in trust for the creditors, subject to distribution upon order of the court,” said White.