Imperial Pacific International (IPI), the once illustrious Saipan casino operator, proposed transferring its casino license to a new investor as part of a new settlement agreement, petitioning the Commonwealth Casino Commission (CCC) to consider its offering. This move aims to avoid the revocation of its license but has caused heated debates among industry stakeholders.
IPI Has Been Struggling to Keep Its License Imperial Pacific Resort Hotel Saipan opened its doors in 2017, aiming to provide a luxury experience comparable to the world’s leading casino resorts. However, various setbacks significantly impacted the company’s revenues, and the ambitious project failed to meet expectations. The COVID-19 pandemic was the final nail in the coffin for the beleaguered venue as it closed its doors for good in March 2020.
IPI could not repay its mounting debts, which now allegedly stand in the hundreds of millions, leading to the suspension of its license in 2021. The ensuing legal battle spanned three years, ending in defeat for the operator, as the US Supreme Court rejected its petition, allowing the CCC to proceed with the revocation hearing concerning IPI’s casino license.
In a last-ditch effort, IPI took the initiative and presented a termination agreement, aiming to settle matters peacefully and avoid another protracted legal battle. The settlement includes several terms, with IPI agreeing to relinquish exclusivity on its license, pay $31 million in arrears license payments, and an additional $16 million for lifting its license suspension.
Initial Negotiations Fell Apart Despite IPI’s attempts to bring this matter to a swift conclusion, Gov. Arnold Palacios rejected the proposal following last week’s revocation hearing, accusing the operator of attempting to escape its debts and responsibilities. He urged the company to provide fair and agreeable settlement terms that were agreeable to the CCC and approved by the Attorney General.
Years of lawsuits, unpaid workers and vendors, broken promises, and an unfinished shell of a hotel building at the heart of our tourist district in Garapan have brought us to this point.
CNMI Gov. Arnold Palacios The rejection has created further uncertainty for IPI. Michael Chen, IPI legal counsel, expressed frustration over the negotiation process, noting that all negotiations occurred without the governor’s involvement until Palacios decided to step in and make a unilateral decision. Chen stated that IPI was willing to reach a compromise but added it was impossible without cooperation from the CNMI authorities.
Chen revealed that IPI had entered into a memorandum of agreement with Kyosei BankGroup for a complete takeover of IPI’s assets, including the casino license. The extra funds from the deal could significantly shift the dynamic of the negotiations, allowing for an amicable resolution. The CCC will hold a public hearing within 30 days to determine the fate of IPI’s license, hopefully settling the matter.
