Court Allows CNMI Retirement Fund To Continue Benefit Payments

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Fund plans to sell $125,000 in property assets

By Alexie Villegas Zotomayor

SAIPAN, CNMI (Marianas Variety, June 27, 2012) – The U.S. Bankruptcy Court granted the Commonwealth of the Northern Mariana Islands (CNMI) Retirement Fund’s revised motion for continued payment of benefits yesterday.

U.S. Bankruptcy Judge Robert J. Faris noted that there were no objections from other parties.

Faris asked Huesman and Coffey to prepare the proposed order for the court’s approval.

Aside from the Fund’s counsels, also present in the hearing were U.S. Trustee Curtis Ching and Creditors’ Committee counsel Don Jeffrey Gelber.

On June 19, the Fund filed a motion seeking the court’s authorization for continued payment of benefits.

According to the Fund, its interim funding subsidiary, the Pension Holdings Corp., was already depleted.

When it filed for Chapter 11 protection on April 17, the Fund told the court that it pre-funded that subsidiary with two months of full pension and two months of health and life insurance premiums.

That subsidiary account, the counsels stated in their motion, has now been exhausted with the issuance of benefits payments on June 15 which leaves the Fund no longer able to satisfy its semi-monthly payment obligations.

In the interim, the counsels acknowledge that the court has issued its memo decision indicating its intent to enter a written order dismissing the Fund’s Chapter 11 case.

The counsels believe that that order could occur until late July as the court intends to consider motions pertaining to fees and administrative expenses prior to issuing the written order.

In filing their motion, the counsels said, "If the debtor [Fund] is unable to resume benefit payments until after the order of dismissal is entered, it would cause undue hardship on Fund members who rely on such benefits to meet basic food, shelter, clothing and medical needs."

It mentioned in this June 19 motion that it would be offloading a property.

Subsequently, the Fund filed another motion to this regard, stating its intent to sell an 868 sq. m. San Vicente property for $125,000.

For the Fund, the sale of the property is in the best interest of the estate and the creditors with proceeds contributing to the cash assets for the creditors’ benefit.

The Fund sought the court’s approval to grant the pension agency limited authority to resume benefits payments beginning with the July 1 payment until the written order is entered.

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