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Unable to collect debt from ASG, PIE asks for gov’t funds in Court Registry

Pacific International Engineering Ltd (PIE) attorney Mark Ude wants the High Court to seize $250,000 in the Court Registry deposited by the government, as partial payment for a court judgment against ASG in 2010 following PIE’s lawsuit.

However, the court in an Apr.23 order denied Ude’s application for a “writ of execution” to seize the money that ASG deposited in the court registry pursuant to a court order in the Southwest Marine of Samoa Inc., case against ASG.

“PIE believes that the money ASG deposited into the Court Registry somehow has not been assigned or earmarked,” according to the three-page order signed by Associate Justice Lyle L. Richmond and Associate Judge Mamea Sala Jr. “Therefore, PIE argues we should seize the fund and award it to PIE in partial satisfaction of its judgment against ASG rendered on Oct. 13, 2010.”

(Total judgment against ASG for breach of contract by failing to pay for construction services provided by PIE came to $321,757 and the judgment also includes court costs and post-judgment interest to begin to accrue at the statutory rate of 6 percent per year as of the entry date of the judgment.)

While PIE’s “frustrations with collecting the debt” owed by ASG “are understandable” the judges say “seizing this fund... is not a solution” and noted that the “funds are assigned and earmarked.”

The judges explained that ASG placed these funds in the court registry under “our order” pending the resolution of the contract dispute between MYD Samoa Inc., and ASG. This dispute was resolved in the federal bankruptcy court in Florida, which is related to the local case between MYD and ASG.

The local case commenced in 2009 when MYD — operator of the shipyard under contract with Southwest Marines of Samoa — sued ASG for breach of contract dealing with the repairs to the MV Sili.  (In this lawsuit, it was Southwest Marine of Samoa vs. ASG)

In connection with the dispute between the two parties, the court ordered ASG to deposit $250,000 in the court registry. But in May 2010, MYD filed for bankruptcy at federal court, who a year later granted ASG’s motion to stay relief in the bankruptcy proceeding to facilitate release of the court registry fund.

Last May, the bankruptcy court approved an agreement between ASG and MYD’s bankruptcy trustee to resolve the dispute between the parties, whereby, ASG agreed to purchase MYD assets at the shipyard for $250,000.

Instead of using the $250,000 in the local court registry for the purchase, ASG used another funding source. As such, ASG owns funds in the court registry and is entitled to reimbursement, according to the judges.

“Since these court registry funds belong to ASG, seizure of those funds and award of them to PIE would, in essence, be a garnishment,” the judges point out. “ASG is not subject to any garnishment without the governor’s prior written approval.”

“PIE has not obtained the governor’s approval to divert these funds in partial satisfaction of PIE’s outstanding judgment against ASG,” said the judges who denied the PIE application to seize the court registry funds.

Meanwhile, the court also on Apr. 23, issued an order granting ASG’s motion to enforce the federal bankruptcy court’s order from last year to release the $250,000 in the court registry.

Ude, who also represented MYD and Southwest Marine of Samoa in the local High Court cases, argued against the release of the funds, saying that among other things, “ASG should not receive the court registry [funds] until its judgment creditors have been reimbursed the amounts owed by ASG.”