IPI creditors to hire investment banker in sale of IPI casino/resort

In an attempt to identify more potential buyers and possibly up the sale price of Imperial Pacific International (CNMI) LLC’s casino/hotel and other properties, IPI creditors intend to hire Intrepid Investment Bankers LLC to market IPI’s properties as a holistic business instead of real estate property.

Yesterday, the official committee of IPI general unsecured creditors submitted an application to the NMI bankruptcy court for entry of an order authorizing the committee to retain Intrepid Investment Bankers LLC as investment banker for the committee.

According to the committee’s request, to identify potential buyers overlooked by the debtor’s limited marketing process (IPI is currently only marketing its properties as real estate), it is essential for the committee to retain proposed investment banker Intrepid.

“The investment banker will bring the necessary expertise and industry connections to market the business effectively as a holistic business. Should this approach not succeed, the real estate broker proposed by the debtor can then proceed with a real estate sale. This comprehensive and strategic asset disposition plan will benefit both the estate and creditors. Intrepid has been informed and understands that no sale may be consummated until after all creditors and parties in interest have received notice of the pending sale and have had an opportunity for a hearing before the United States Bankruptcy Court,” said the committee’s request.

IPI’s primary real estate assets include a hotel building currently under construction with a casino, a leasehold interest in approximately 19,204 square meters of land leased from the DPL under Lease Agreement No. LA-15-002S, and IPI’s ownership interest in Imperial Pacific Properties, LLC, which holds a leasehold interest in eight lots adjacent to the leasehold property.

According to the motion, on Aug. 10, 2024, IPI filed a motion to approve bid procedures for the sale of substantially all of the debtor’s assets and related relief to essentially liquidate its assets.

On Sept. 5, the committee filed an opposition to the Bid Procedures Motion, which states that the committee has identified an investment banker to facilitate a sale of IPI’s assets as a holistic business and will file an application before the hearing on the Bid Procedures Motion.

Subsequently, on Sept. 6, 2024, IPI submitted its application to employ Keen-Summit Capital Partners LLC as its real estate brokers.

The broker application sought to employ Keen-Summit Capital Partners LLC as the real estate broker to market IPI’s assets.

Notably, the Bid Procedures Motion explicitly excludes the casino license from the assets and IPI has confirmed it only intends to market the assets as a real estate sale, said the committee

“Although the CCC has stated that a casino license will not be granted to the debtor or parties connected to the debtor, it has expressed a willingness to work with disinterested bidders for granting a casino license. By treating the assets merely as real estate, the debtor deters potential buyers in the gaming and gambling industry from submitting bids, thereby missing opportunities to capture the cumulative value of the assets as a casino hotel,” the committee explains.

To avoid suboptimal outcomes and to maximize the value of the estate’s assets, the committee argues that the assets must be market tested as a casino/hotel business.

“This comprehensive approach alerts potential buyers of the opportunity to purchase the casino license and operating the property as a casino, thereby enhancing the estate’s overall value. The committee owes a fiduciary duty to the creditors and is thus obligated to explore this option to ensure the best possible financial recovery,” said the committee.

IPI obtained its exclusive casino license for the island of Saipan and opened its operations in 2014. IPI’s casino is primarily situated on property leased from the CNMI Department of Public Land.

The COVID-19 pandemic forced the closure of IPI’s operations in March 2020.

In April 2021, IPI’s casino license was suspended by the Commonwealth Casino Commission for nonpayment of fees and other alleged monetary defaults.