The U.S. District Court for the NMI has denied Pacific Rim Land Development LLC’s request to auction off Imperial Pacific International (CNMI) LLC’s assets after an IPI investor deposited over $5 million as a security fund.
District Court for the NMI Chief Judge Ramona V. Manglona denied Pacific Rim’s request to sell IPI’s gaming equipment, vehicles, and heavy equipment after an investor deposited a security fund of $5,599,975 in an investment portfolio.
A stipulation from Pacific Rim and IPI indicated that the IPI investor deposited security in an investment portfolio consisting of short-term U.S. government bonds with Merrill Lynch, Pierce, Fenner & Smith Inc., First Hawaiian Bank Bldg., 400 Route 8, Suite 403, Guam.
In Manglona’s order establishing security pending appeal, she said Pacific International Property Management LLC or PIPM had resolved to place $5,525,363.98 within the absolute discretion of the court for the purpose of securing a stay and paying on the judgment in the event that Pacific Rim prevails in the appeal.
The court noted that PIPM increased the amount to be deposited to $5,599,975 to cover post-judgment fees, costs, and interest.
According to the stipulation, PIPM is not owned by IPI and PIPM does not own IPI. PIPM is a separate and independent business entity. PIPM agreed to pledge its own funds in the amount of $5,599,975.00 as security under FRCP Rule 62 as an alternative to a bond.
“The fund shall be available in full to satisfy the judgment, including fees, costs, interest, and damages for delay that may be awarded, if the appeal should be dismissed or the judgment affirmed,” Manglona said.
In addition, Manglona said the fund shall be available in full to satisfy any modification of the judgment ordered by the District Court, appellate court, or, if the judgment should be affirmed only in part, to satisfy that part of the judgment affirmed, including fees, costs, interest and damages for delay that may be awarded.
The judge added that the fund will also be available in full for return to PIPM only if IPI prevails on the appeal.
Once the appeal is concluded, the parties shall return to the District Court for an order directing how the fund will be released or transferred.
The federal court will determine the prevailing party on the appeal.
“In the event that the court determines that Pacific Rim prevailed on appeal, the court shall direct the fund to be released to Pacific Rim,” Manglona said.
In the event that the court determines that IPI prevailed on the appeal, the court shall order the fund to be released to PIPM.
In the event it is not clear who the prevailing party is on the appeal, the court shall enter orders that will achieve justice, Manglona said.
Manglona also directed Pacific Rim to take no action to execute or enforce judgment. This includes, without limitation, the filing of a writ of execution to remove funds from any bank accounts of IPI and the forced sale of assets of IPI through an auction.