Pacific Gardenia files for bankruptcy

Pacific Gardenia Hotel yesterday filed a bankruptcy case with the U.S. District Court as talks of its receivership is still awaiting a decision from the Superior Court.

Pacific Gardenia president Ronald Sablan filed the petition under chapter 7 of U.S. Bankruptcy code and chapter 11 Small Business as defined in the U.S. Code.

Sablan, in a document, declared an estimated asset of up to $10 million and an estimated debt of the same amount.

This developed as the Superior Court is expected to rule on the motion to place the corporation under receivership this week.

The Commonwealth Development Authority asked the court last July to appoint a trustee to manage and collect the profits of Pacific Gardenia Hotel until the case against the hotel’s owners is resolved.

CDA said that as of last Jan. 20, Sy’s Corporation, which does business as Pacific Gardenia Hotel, and its officers Ronald, Maria Ana, and Jeannette Sablan owe CDA over $2.4 million, and are more than five years delinquent in their payment.

CDA attorney F. Matthew Smith said that CDA’s rights and interests would be irreparably injured unless a receiver is appointed to take charge of the business affairs of Sy’s [Corporation] and to take possession of its property until a final decision or order from the court is issued following foreclosure.

Court records showed that Jeannette, sister of Ronald, has already agreed to the proposed appointment of a trustee on June 17.

In the motion filed earlier, Smith claimed that spouses Ronald and Maria Ann Sablan have been mismanaging the assets of Pacific Gardenia Hotel and Sunset Bar and Grill.

CDA alleged that Sablans are maintaining separate sets of accounting books and had presented fictitious books to CDA in the past.

Sy’s Corporation is reportedly operating without a CNMI business license due to unpaid taxes, and owes employees over $100,000 in back wages.

Further, all checks payable to Sy’s Corporation were allegedly being diverted and deposited directly into the personal accounts of the Sablan couple.

CDA said that if the court appoints a receiver, the trustee could collect, account for and place all proceeds from the hotel operations into a secure account that can be readily available for the court to distribute to entitled persons.

The case was filed after the Gardenia owners failed to make required payments for several loans they obtained from the authority.