The Federal Bankruptcy Court has issued a Tentative Ruling by Judge Faris. In the Tentative Ruling the Judge has stated that he “is inclined to rule that it [the Bankruptcy case] cannot succeed”.
[SEE Marianas Variety story here: http://mvariety.com/cnmi/cnmi-news/local/46854-breaking-news-us-bankruptcy-judge-to-dismiss-fund-petition.php ]
[SEE Saipan Tribune story here: http://www.saipantribune.com/newsstory.aspx?cat=1&newsID=119297 ]
Barring any last minute revelation that may be given during the oral arguments on June 1, 2012, there is a very strong chance that the case will be dismissed.
Some members of the community had supported the bankruptcy because of the fear of having the case sent back to Superior Court. The Fund, itself, has recently stated that the tools provided in Federal Court are needed in order to enforce the local court’s judgement against the CNMI government. Perhaps, the next best step, should the bankruptcy be dismissed, is to have the members and the NMIRF rally behind the Federal Receivership case (roe/Doe Case) that still sits in Federal Court.
The fund has argued against Receivership in the past stating that “Receivership is akin to liquidation”, yet in their own document ( http://www.nmiretirement.com/downloads/NMIRF_341_Notice_for_Service.pdf ) posted on their website and sent out to members it clearly states the following at the top of page 2:
Explanations: Filing of Chapter 11 Bankruptcy CaseA bankruptcy case under Chapter 11 of the Bankruptcy Code (title 11, United States Code) has been filed in this Bankruptcy court by or against the debtor listed on the front side, and an order for relief has been entered. Chapter 11 allows a debtor to reorganize or liquidate pursuant to a plan.
It is clear than that even though the Fund had realized the possibility of liquidation resulting from filing the Chapter 11 Bankruptcy they still proceeded. Since we know that Receivership is not equal to liquidation but rather a remote possible outcome (as it is with Chapter 11 Bankruptcy) there shouldn’t be any strong reason for the Fund to continue to oppose Federal Receivership.
The Fund recently made a move to transfer the Superior Court case to Federal Court as well. A similar motion was attempted by S. Rayphand months ago. The Fund also opposed that move at that time. Seeing how they now support the move to Federal Court, perhaps they will also stand down on future attempts to move the case to Federal Court.
Judge Faris did commend the Trustees on bringing the case to Bankruptcy court. He stated that they were attempting to find a solution. The solution they have opted for most likely will not be allowed. That being the case, I would hope that the Trustees now allow the members who have attempted 3 years ago to enlist Federal Receivership support to move forward with their support should the Bankruptcy be thrown out.
You can view the Tentative Ruling from Judge Faris below.