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BoH seeks instruction from feds for frozen ASG funds

“Both this Court and the High Court have ‘in personam’ jurisdiction over BoH…”
fili@samoanews.com

The American Samoa Government on Tuesday asked the High Court to enforce its July 11 order requiring the Bank of Hawai’i to “restore ASG’s money which BoH unlawfully froze on July 20,” according to ASG’s motion filed by Assistant Attorney General Michael L. Iosua.

The more than $800,000 frozen by BoH followed a Writ of Execution issued by the federal court in Honolulu based on a request by the Hawaii shipyard company Marisco Ltd., who had successfully sued ASG for failure to pay this money for purchases and service already provided.

In an effort to facilitate settlement in the Marisco vs. ASG case at the federal court in Honolulu, Iosua said “ASG agreed not to seek enforcement” of the High Court order until July 23rd...”

“However, instead of restoring the money as agreed, BoH filed a motion [with the High Court] for reconsideration and retained ASG’s money,” Iosua contends and noted that it’s “necessary that BoH comply” with the High Court’s order.

“BoH has been provided sufficient time to restore ASG’s money, but has failed to do so,” said Iosua, adding that the High Court had not granted a stay in its July 11 order and BoH is not entitled to such stay.

Under local regulations, the fact that BoH has filed a motion for reconsideration does not alleviate BoH from its duty to comply with the July 11 court order, which should be enforced, he pointed out.

In the BoH reconsideration motion, the bank argued that ASG has not shown that there is a substantial likelihood that it will prevail at trial.

BANK SEEKS INSTRUCTIONS FROM FEDERAL COURT

While ASG’s motion was filed here, BoH asked the federal court for instructions on how the bank should proceed forward with the money frozen in the ASG general fund. The court has since set a hearing for Aug. 16 on the bank’s motion.

BoH’s Honolulu attorney Robert A. Marks said the “instruction motion” is made necessary “because of the conflicting directives given” to the bank: the Writ of Executive and the High Court order.

A footnote in BoH’s motion states that it released in late June $164,813 back into the ASG account; transferred an additional $95 legal procession fee from the ASG account and the only amount frozen at BoH is $824,071.15.

According to Marks, the bank cannot comply with either the federal court’s Writ or the High Court’s order “without violating the other”.

The bank “is a neutral stakeholder in this dispute and, through no fault of its own, finds itself subject to conflicting judicial orders. BoH seeks the aid of this Court in adjudicating how BOH should proceed under the circumstances,” said Marks.

SETTLEMENT STATUS

Upon filing of the High Court orders on July 11, U.S. Magistrate Judge Barry M. Kurren met with attorneys for BoH, Marisco and ASG in chambers to consider the settlement of this dispute, said Marks, who noted the bank “received continuing assurances from ASG’s attorney that ASG would not seek to enforce the High Court’s Order against BoH.”

Kurren convened a formal settlement conference with Marisco and ASG on July 20 and the “minute order indicates that a tentative settlement was reached, but BoH has not been given joint instructions from ASG and Marisco with respect to the disposition of the funds it is holding pursuant to the Writ.”

“Because the case was settled in principle, BoH did not seek ASG’s continuing agreement to stand down on enforcing the High Court’s Order,” he said. He also said another settlement conference hearing was held on July 30 and Marks said BoH “learned that the settlement process is at an impasse.”

CONCLUSION

Marks said BoH “has two bank branches in American Samoa and is at imminent risk of a contempt citation and sanctions unless it complies with the orders of the High Court.”

He also noted that BoH has urged the Hawai’i attorneys for Marisco and ASG to reach a settlement, and has commented on various draft settlement agreements. However, to date, ASG and Marisco have not been able to document the tentative settlement they reached on July 20, he said.

“BoH seeks this Court’s assistance by giving instructions as to how BoH should proceed,” said Marks. “Both this Court and the High Court have ‘in personam’ jurisdiction over BoH in as much as BoH does business both in this district and in American Samoa.”



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