Smith: It’s not receiver’s fault

Former Pacific Gardenia Hotel employees who have back wage claims, as well as the receiver himself, cannot be compensated until a judge is appointed to the Commonwealth Development Authority’s foreclosure case against the hotel, according to CDA.

F. Matthew Smith, attorney for CDA, reported yesterday that the court has yet to appoint a judge to handle the case, which was originally handled by presiding judge Robert Naraja.

The case was transferred to associate judge Juan Lizama after Naraja recused himself from the case. But after appointing Palacios as receiver several months ago, Lizama himself withdrew from the case.

“At this time, we are still waiting for a new judge to be appointed to handle the case and to accept the first report from the receiver. Once a judge is appointed, the receiver can make his report and those parties that are owed money by [Pacific Gardenia owner and former general manager] Ron Sablan and his former employees can make their claims and the receiver can react accordingly,” Smith said.

He added that Palacios himself could not receive compensation until a judge was appointed.

“Until then, it is unfair to criticize a receiver who is only doing what he has been instructed by the court to do—preserve Pacific Gardenia,” he said.

Smith further maintained that the payment of back wages allegedly owed the former hotel employees was not the problem of the hotel’s new receiver, but of Sablan.

“It is not the receiver’s responsibility to pay old back wages that cannot be verified and that were not accrued under his watch,” Smith said. “The fact is that since the receiver took over, Pacific Gardenia employees are finally getting regular pay checks.”

He noted that Sablan negotiated the back wages with the Department of Labor and the involved workers without court approval and without guaranty that the amounts negotiated were accurate or in order.

“This is a Ron Sablan problem and not a receiver problem,” said Smith.

Eleven former Pacific Gardenia workers have written the Department of Labor demanding payment of their wage claims totaling $19,035.54.

The workers—each owed between $574.23 and $3,415.82—said Palacios was ignoring their demand, even as he was hiring new employees.

But Palacios said he could not pay the workers because “my hands are tied.” He explained that the time cards and other documents supporting the workers’ claims for back wages—all of which were accumulated under Sablan’s management—could not be located.

Palacios also said as a court-appointed receiver, he needed instruction from a judge before he could act on the workers’ demand.