Imperial Pacific seeks court approval for stalking horse bidder

February 11, 2025

Imperial Pacific seeks court approval for stalking horse bidder

The troubled casino developer Imperial Pacific International (IPI) and its committee of unsecured creditors, has petitioned a federal court to approve Loi Lam Sit as the stalking horse bidder for the sale of its assets.

The debtor initially chooses a stalking horse bidder to set a baseline price for the assets in an auction, helping to attract other bidders. The idea is to create a minimum price that other bidders must surpass, creating a competitive environment and potentially driving up the final sale price.

According to The Marianas Variety, Loi Lam Sit, the general manager of Top Pride International, has been proposed as the stalking horse bidder. If designated as the stalking horse bidder, Sit will offer $12.5 million, along with a $1.25 million good faith deposit.

This amount sets the stage for other potential buyers to enter the auction and place their bids on IPI’s assets. Assets for sale include contracts, property in Saipan, and a potential casino license. The auction is scheduled for 26 February 2025.

Federal court approves bidding process

The federal court overseeing the bankruptcy case of Saipan casino operator Imperial Pacific International (IPI) approved the bidding procedure for the sale of the company’s assets, confirming the minimum bid of $10 million in cash for all IPI assets. This ruling also affirms a committee of unsecured IPI creditors to manage the bidding process, select a stalking horse bidder and schedule an auction and sale hearing.

The auction will involve IPI’s assets but not its casino licence, with the final sale subject to competitive bidding and court approval. IPI and the creditors’ committee will also propose a break-up fee for the stalking horse bidder.

Qualified bids must meet specific requirements, such as disclosing the identities of the bidders, their connections to IPI or other bidders, and details of the assets and liabilities involved.

The court also approved the stipulation for IPI and the creditors’ committee to proceed with the bidding process, including taking any necessary actions to implement the procedure according to the timeline.

Bankruptcy details

IPI filed for Chapter 11 bankruptcy on 19 April 2024, citing over $165.8 million in debts. The company operated a casino in Saipan until it closed in March 2020 due to the Covid-19 pandemic. Chapter 11 bankruptcy enables companies to restructure their debts and continue operations.

Earlier last year, IPI had declared Chapter 11 bankruptcy, citing over $165.8 million in debts. IPI operated a casino in Saipan for four years until the Covid-19 pandemic forced its closure in March 2020. Chapter 11 bankruptcy allows companies to restructure their debts and continue operating.

The court had previously rejected IPI’s planned asset sale procedures while allowing the creditors’ committee to retain Intrepid Investment Bankers LLC to sell the properties for a higher sale price.