The Superior Court has ordered Commonwealth Ports Authority board chair Jose R. Lifoifoi to show proof that the shares of late business tycoon Larry Hillblom in a corporation had been transferred to him.
Judge pro tempore Alberto C. Lamorena III also ordered Lifoifoi and his daughters, Ignacia L. Evangelista and Remedio L. Pangelinan, to submit a list of the properties owned by the corporation, Quad L.
Lamorena gave the parties until March 7, 2018, to submit the information/documents to the court.
The judge issued the order after hearing arguments last Friday on Lifoifoi’s application for a preliminary injunction to prevent Evangelista and Pangelinan from distributing dividends or transferring real property until Lifoifoi is heard on the merits of his lawsuit.
Lamorena placed Lifoifoi’s motion for preliminary injunction under advisement.
Lifoifoi is suing his two daughters and Quad L’s Co., also known as Quad L Corp., for conversion, unlawful taking, breach of fiduciary duty, and removal of directors by judicial proceeding.
Lifoifoi, through counsel Charity R. Hodson, asked the court to declare him as the only lawful shareholder of Quad L and finding all of his shares that were transferred without his consent void from the beginning.
According to Hodson in the complaint filed last September, in 1994, Lifoifoi and Hillblom created a corporation called Nha Thrang Inc., listing them as its sole shareholders.
Hodson said from the date of its incorporation until 1995, Lifoifoi and Hillblom remained the sole shareholders of Nha Thrang Inc.
Hillblom died in a plane crash on May 21, 1995.
In 1998-1999, Lifoifoi allegedly bought out the shares for Nha Thrang Inc. from the Hillblom estate and became the sole shareholder.
Since 1998, Hodson said, Lifoifoi’s four children—Evangelista, Pangelinan, Joseph Lifoifoi, and Josephine Tajibmai—have been running his company in various positions on the board of directors and as officers of Nha Thrang Inc.
Tajibmai passed away in September 2015, leaving her siblings to run the company.
In his lawsuit, Lifoifoi alleged that Evangelista and Pangelinan distributed his assets and shares without his consent.
He wants the court to direct his daughters to transfer their shares back to him and to transfer corporate assets back to the corporation.
Lifoifoi also asked the court to issue a preliminary injunction.
At the hearing last Friday on Lifoifoi’s motion for preliminary injunction, Hodson appeared as counsel for Lifoifoi, while lawyers Benjamin Petersburg and Mark Hanson served as counsel for Evangelista, Pangelinan, and Quad L.
In Lifoifoi’s motion for preliminary injunction, Hodson said they request the relief not to determine the status of the case but to preserve the status quo until a final determination has been made on the merits.
Hodson said the last uncontested status prior to this controversy was when Lifoifoi was the sole shareholder of Quad L, the corporation retained its real property assets, and Evangelista and Pangelinan were officers and directors of Quad L.
Hodson said Lifoifoi is merely requesting that defendants be stopped from distributing dividends and from transferring any more corporate assets.
Hodson said the corporate records of Quad L show that the last distribution occurred in 2007.
Further, the lawyer said, Evangelista and Pangelinan will continue to be compensated in their positions as officers and directors.
On the issue of public interest, Hodson said allowing corporate officers and directors to transfer shares of shareholders to themselves, wrongfully distribute dividends amongst themselves, and sell corporate assets to themselves at nominal prices is harmful to the core concept of fiduciary duty and undermines commercial business in the Commonwealth.
In defendants’ opposition to Lifoifoi’s motion, Hanson said the motion is factually and legally unfounded and should be denied.
Hanson said Lifoifoi is not seeking to maintain the status quo, as he is improperly seeking to alter the status that has existed for almost 19 years since the daughters became the record owners of Quad L.
Hanson said for the last 19 years, Evangelista and Pangelinan have been the record owners, directors, and officers of Quad L and ran it successfully with the knowledge and approval of Lifoifoi.
Hanson said because Lifoifoi advances legal claims with adequate monetary damage and other legal remedies at law, no injunction may issue.
He said there is no probability of Lifoifoi’s success on the merits of his claim that he is still the shareholder of Quad L.
Hanson said Lifoifoi drafted a will in 2002 and did not include any shares in Quad L.
He said Lifoifoi filed legally mandated statements of financial interest for the years 2001-2005 with the CNMI Office of the Public Auditor and did not include any shares in Quad L.
The lawyer said it is clear from Lifoifoi’s own conduct that he knew of and consented to the transfer of Quad L to his children.