By Haidee V. Eugenio Reporter, Saipan Tribune

Inos administration: This is not end of the road

A New York Court of Appeals ruling on Tuesday makes it harder for the CNMI to collect $36 million in taxes from computer tycoon William Millard. The Inos administration said last night it is “dismayed” by this development although they believe “this is not the end of the road.”

Millard, once listed as among America’s richest and founder of ComputerLand Corp., allegedly owes the CNMI some $118 million, inclusive of the $36 million in initial income tax liability, plus interest on judgments.

The Millards briefly resided in the CNMI during which time they sold their interests in ComputerLand for over $200 million.

On Tuesday (2), New York’s Court of Appeals ruled that Toronto-based Canadian Imperial Bank of Commerce or CIBC could not be ordered to turn over assets held at its Cayman Islands subsidiary to enforce judgments.

Press secretary Angel Demapan, when asked for comment, said it’s unfortunate that the courts ruled against the CNMI based on their findings.

“This was one option the Commonwealth sought in an effort to recover funds that are due to the government. .Still, this is not the end of the road. This is just one component of the Commonwealth’s efforts. We will continue to look at all other available options in this case,” Demapan told Saipan Tribune.

He said the administration is “more so dismayed than surprised” by the court ruling.

Through New York-based Kobre & Kim law firm, the CNMI had sought a court order for CIBC to turn over assets that the Millards allegedly deposited at a Cayman Islands subsidiary.

The CNMI tried to get CIBC’s New York branch to garnish the assets.

CIBC opposed the request, saying that under New York law, it could not be ordered to turn over assets of a foreign bank subsidiary.

New York’s Court of Appeals ruled in their favor when it said CIBC could not be ordered to turn over assets held at its Cayman Islands subsidiary to enforce the judgments. It also said CIBC needed to have custody or possession of the assets, not just control over the subsidiary.

Demapan said the administration reserves comment on legal strategies it plans to undertake, given that the Millard matter is “still an active case.”

The CNMI appealed to the 2nd U.S. Circuit Court of Appeals. That court asked New York’s Court of Appeals for guidance in interpreting state law on the issue.

The CNMI tapped New York-based Kobre & Kim law firm in 2010 to go after the Millards’ unpaid taxes plus interests and judgments, which is more than the CNMI’s fiscal year 2013 budget of $114 million.

Meanwhile, Millard’s unfinished castle and mansion in Papago will be housing a Chinese firm called Nereus Corp. for its real estate and diving business on Saipan in May, but some of the families who have been living in the property free of charge for several years questioned whether it is “proper and legal” for anyone to generate revenue from the property. (With Reuters)

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