U.S. District Court for the NMI\u2019s Bankruptcy Division designated judge Robert J. Faris yesterday upheld his tentative ruling dismissing the NMI Retirement Fund\u2019s Chapter 11 bankruptcy petition.<\/p>\n
In a videoconference that lasted over an hour, Faris granted the motions to dismiss filed by the U.S. Trustee\u2019s and several other parties, reiterating his opinion in his tentative ruling that the Fund is a \u201cgovernmental unit\u201d and not eligible for relief under Chapter 11 of the Bankruptcy Code.<\/p>\n
He also ruled that the Fund, which is a part and an instrumentality of the CNMI government, does not qualify as a municipality.<\/p>\n
The dismissal of the case, however, does not call for a celebration, Faris said, describing the Fund\u2019s state as a disaster. <\/p>\n
\u201cThe way the Fund is being treated [by the government] is shameful! The way the beneficiaries are being treated is shameful!\u201d he said.<\/p>\n
After Faris gave his decision, attorney Jeremy B. Coffey, one of the Fund\u2019s lawyers, asked the court to delay or stay the order, saying they need to discuss the ruling with the Fund.<\/p>\n
Faris told Coffey to instead file a motion as the automatic stay remains while he has yet to issue a written order.<\/p>\n
Faris granted the Fund\u2019s request for an order authorizing the retention of the law office of Braddock J. Huesman and the law office of Brown Rodnick LLP as counsels for the Fund.<\/p>\n
Coffey argued for nearly an hour in trying to convince Faris not to dismiss the case. He explained, among other things, why the Fund should not be considered a \u201cgovernmental unit\u201d within the meaning of the Bankruptcy Code. He cited the Fund\u2019s lack of traditional government powers and it being not performing \u201ctraditional governmental functions.\u201d<\/p>\n
Coffey also cited why the Fund decided to file the Chapter 11 case after a six-year court battle with the CNMI government. \u201cIt is obvious that they are not going to pay its obligations,\u201d he said.<\/p>\n
Coffey said they believe that the Official Creditors\u2019 Committee is starting to realize the need for this Chapter 11 petition.<\/p>\n
In sum, Coffey said the Fund is not controlled by the government and that the only way to keep it alive and functioning is allow it to proceed with its Chapter 11 petition.<\/p>\n
After Coffey\u2019s arguments, Faris asked anybody to speak up from the side who wants to keep the bankruptcy case going.<\/p>\n
Only Ruth Tighe, a columnist and a retiree, stood up and expressed her support for the Fund\u2019s bankruptcy petition.<\/p>\n
Tighe said that Chapter 11 bankruptcy rules\u2014and the unique tools they provide\u2014may not be the perfect solution to the Fund\u2019s dilemma, but they are the only ones she knows that will keep the Fund alive and functioning in a manner conducive to its rehabilitation.<\/p>\n
\u201cFor the sake of the common good, may I urge that you reconsider your \u2018tentative ruling\u2019 and allow the CNMI Retirement Fund\u2019s bankruptcy petition to proceed,\u201d Tighe said.<\/p>\n
She noted that the outcome of this case will affect not only the individual members of the Fund\u2014active and retired\u2014but also the local economy of which they are a part.<\/p>\n
\u201cMoreover, this case will also have repercussions for the millions of individual creditors, beneficiaries and the like in the U.S. mainland, whose pension plans are also facing financial disaster,\u201d Tighe said.<\/p>\n
She also mentioned five distinct benefits that, according to her, are distinct and \u201care not available elsewhere within the repertoire of existing law.\u201d<\/p>\n
In an interview after the hearing, attorney Braddock J. Huesman, one of the Fund counsels, said they are disappointed with the judge\u2019s ruling.<\/p>\n
\u201cIt\u2019s unfortunate. It\u2019s what he rules so we go from there,\u201d Huesman said.<\/p>\n
When asked if the Fund is going to appeal, Huesman replied that they are not going to talk about it right now. Until the judge issues the dismissal order, the stay of the order is in place, he added.<\/p>\n
Attorney Ramon Quichocho, counsel for retiree Joaquin Atalig and another retiree, said that Faris\u2019 decision is good for the retirees.<\/p>\n
\u201cWe agree with Judge Faris that it\u2019s not a victory for anyone because both sides pretty much suffered through this ordeal. But we\u2019re glad it\u2019s over,\u201d Quichocho said.<\/p>\n
Attorney Stephen Woodruff, counsel for two unnamed retirees, agreed with Faris\u2019 decision, saying the law is clear from their point of view.<\/p>\n
Attorney Robert T. Torres, counsel for the Commonwealth Ports Authority, said the dismissal was appropriate.<\/p>\n
Torres said they feel that upon dismissal they will return to Superior Court associate judge Kenneth L. Govendo\u2019s chambers to see about the remedy that the Fund and the government would propose.<\/p>\n
\u201cIt\u2019s really not about jurisdiction anymore. It\u2019s about what\u2019s the remedy. Are we going to try to rehabilitate in a slow and progressive way? Because the only other option would be to liquidate,\u201d Torres said.<\/p>\n
\u201cI don\u2019t believe that anyone wants that option. So the focus now is not for celebration of dismissal but for concern of the remedy of rehabilitation and that\u2019s what we look forward to working together on,\u201d he added.<\/p>\n
Attorney Bruce Jorgensen\u2019s group, counsel for two unnamed retirees, first brought up the motion to dismiss on the grounds that the Fund\u2019s structure and statutory existence makes it clear that it is a \u201cgovernmental unit\u201d of the CNMI. The U.S. Trustee followed the motion to dismiss on the same grounds, quickly followed by two retirees, former Tinian senator Esteven M. King, the CNMI government, and CPA. <\/p>\n
In his tentative ruling issued Tuesday, Faris said the Fund\u2019s board of trustees should be praised, not criticized, for commencing the bankruptcy case.<\/p>\n
\u201cThe trustees find themselves in an intolerable position. The Fund for which they are responsible is caught between an irresistible force\u2014obligations to retirees which it cannot pay\u2014and an immovable object\u2014the government, which has persistently failed to pay its debt to the Fund,\u201d Faris said.<\/p>\n
\u201cThe trustees\u2019 attempt to find a solution to this dilemma is creative and praiseworthy, even though I am inclined to rule that it cannot succeed, \u201c the judge added.<\/p>\n","protected":false},"excerpt":{"rendered":"
U.S. District Court for the NMI\u2019s Bankruptcy Division designated judge Robert J. Faris yesterday upheld his tentative ruling dismissing the NMI Retirement Fund\u2019s Chapter 11 bankruptcy petition.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-161707","post","type-post","status-publish","format-standard","hentry","category-local-news"],"_links":{"self":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/161707","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/comments?post=161707"}],"version-history":[{"count":0,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/161707\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/media?parent=161707"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/categories?post=161707"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/tags?post=161707"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}