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IPI can’t pay this year’s $15.5M license fee

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IMPERIAL Pacific International will not be able to pay the $15.5 million annual casino license fee for this year, IPI Chief Executive Officer Donald R. Browne told the CNMI government.

Wednesday was the deadline for IPI to pay the annual exclusive casino license fee.

In his letter to Gov. Ralph DLG Torres, Senate President Victor Hocog, House Speaker Blas Jonathan Attao, Attorney General Edward Manibusan, CNMI Lottery Commission Chairman Mark Rabauliman and Commonwealth Casino Commission Acting Executive Director Andrew Yeom, Browne said, “In all likelihood, IPI will remain closed, and have no income for the next eight months.”

He said IPI had to furlough hundreds of its employees, requiring the casino operator to pay repatriation costs, and three-fourths of the CWs’ annual wages they should have earned.

When IPI reopens, Browne said, it will incur significant reopening costs as it will have to bring back hundreds of workers. IPI will have no income until it reopens, he added.

Even though IPI has closed the casino, he said it still has significant operating costs each month that it must pay. It must periodically turn on air-conditioning so that the furnishings do not get moldy and so the electrical gaming machines do not rust. IPI will  maintain security even though there is no income to pay for this and other costs, Browne said.  

“IPI is presently current on all wages owed to its remaining employees. IPI is providing its employees that remain on Saipan with health insurance. IPI is keeping the power on for its employees who remain in company-provided housing. IPI is in the process of repatriating hundreds of employees who will not remain with IPI to their home countries,” Browne said.

“Unfortunately, IPI will not be able to pay the annual licensing fee on Aug. 12, 2020. What has happened is a classic ‘force majeure’…beyond the control of IPI,” he added.

He said IPI is seeking relief as allowed by the casino license agreement when there is “force majeure” or unforeseeable circumstances that prevent someone from fulfilling a contract.

Likewise, Browne said, IPI will owe about $3 million in October to support the operations of the Commonwealth Casino  Commission. There will be no casino operations to monitor until IPI reopens. Therefore, he said, IPI proposes a delay in the payment of the $3 million until 30 days before its reopening.

“What IPI is requesting is not unheard of,” Browne said. “Airlines in the U.S. were almost completely shut down by the pandemic. Not only has the federal government provided the airlines relief from certain taxes and fees but has also given the airlines tens of millions of dollars in direct [assistance] so that they would not permanently close. IPI is only asking for the relief from certain fees.”

He added that IPI understands that the Legislature may be required to approve the relief IPI seeks, so it is requesting lawmakers for their support.

 

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