Bellas says priorities will be to pay workers, taxes
The owner of Tinian Dynasty Hotel & Casino, Hong Kong Entertainment (Overseas) Investments Ltd., has total assets of $55.2 million, but its total liabilities reach $258.5 million, according to court documents.
Asked for comments about HKE’s petition for Chapter 11 bankruptcy, HKE counsel Timothy H. Bellas disclosed yesterday that one of their first priorities will be to ask the bankruptcy court for permission to pay the unpaid salaries of Tinian Dynasty employees and unpaid federal and local taxes.
Bellas said the purpose of Chapter 11 is not to go out of business but to continue doing so.
“The filing is not entirely complete and we will be supplementing the case with additional and amended pleadings this coming week,” Bellas said.
HKE filed the bankruptcy petition in the U.S. District Court for the NMI on Friday.
According to the petition, HKE’s real property is worth $51,273,673 and personal property is worth $3,931,207.27, for total assets of $55,204,880.27.
HKE owes $175,282,787 to creditors who have claims secured by property; $76,793,708.35 to creditors who have unsecured claims; and $6,406,447.12 to creditors who have claims of non-priority amounts of unsecured claims, for total liabilities of $258,482,942.47.
Among the creditors listed as having priority unsecured claims are the U.S. Department of the Treasury’s Financial Crimes of Enforcement Network, which has a total claim of $75 million; Internal Revenue Service, which has a total claim of $286,617.87; and the CNMI Treasury, which has a total claim of $225,671.31.
CUC also claims for payment of past due utilities in the amount of $649,180.84 and about $180,000 in estimated October 2015 utilities.
HKE president Chun Wai Chan filed the petition.
According to the minutes of an HKE board meeting in Hong Kong last Nov. 13, the board was advised that the corporate financial condition is such that the filing of bankruptcy petition is necessary to avoid the possibility that the assets of the corporation will be insufficient to meet its obligations based on litigation expenses and the possible liabilities that may result from unliquidated but disputed claims.
The board agreed that it appears prudent and essential to seek the protection of the bankruptcy court in order to have the opportunity to formulate a plan for the rehabilitation of the corporation through reorganization.