In re Kolonia Consumers Cooperative Association [2000] FMSC 1; 9 FSM Intrm. 297 (Pon. 2000) (4 January 2000)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite case as In re Kolonia Consumers Cooperative Association[2000] FMSC 1; , 9 FSM Intrm 297 (Pon 2000)

IN RE KOLONIA CONSUMERS
COOPERATIVE ASSOCIATION,
Defendant.

CIVIL ACTION NO. 2000-001

RICHMOND WHOLESALE MEAT CO.,
Plaintiff,

vs.

KOLONIA CONSUMERS COOPERATIVE
ASSOCIATION,
Defendant.

CIVIL ACTION NO. 1995-010

PACIFIC AGRI-PRODUCTS INC.,
Plaintiff,

vs.

KOLONIA CONSUMERS COOPERATIVE
ASSOCIATION,
Defendant.

CIVIL ACTION NO. 1995-084

NBK CORPORATION,
Plaintiff,

vs.

KOLONIA CONSUMERS COOPERATIVE
ASSOCIATION,
Defendant.

CIVIL ACTION NO. 1995-113

BRUNO'S QUALITY PRODUCTS,
Plaintiff,

vs.

KOLONIA CONSUMERS COOPERATIVE
ASSOCIATION,
Defendant.

CIVIL ACTION NO. 1995-116

TRIPLE J,
Plaintiff,

vs.

KOLONIA CONSUMERS COOPERATIVE
ASSOCIATION,
Defendant.

CIVIL ACTION NO. 1995-117

BANK OF HAWAII,
Plaintiff,

vs.

KOLONIA CONSUMERS COOPERATIVE
ASSOCIATION,
Defendant.

CIVIL ACTION NO. 1995-126

IN RE KOLONIA CONSUMERS
COOPERATIVE ASSOCIATION,

RICHMOND WHOLESALE MEAT CO.,
Plaintiff,

vs.

KOLONIA CONSUMERS COOPERATIVE
ASSOCIATION,
Defendant.

CIVIL ACTION NO. 1996-001

COCA-COLA BEVERAGE CO.
(MICRONESIA), INC.,
Plaintiff,

vs.

KOLONIA CONSUMERS COOPERATIVE
ASSOCIATION,
Defendant.

CIVIL ACTION NO. 1999-018

ORDER AND MEMORANDUM

Martin Yinug
Associate Justice

Decided: January 4, 2000

APPEARANCES:

For the Plaintiff (Richmond Wholesale):
Fredrick Ramp, Esq.
P.O. Box 1480
Kolonia, Pohnpei FM 96941

For the Plaintiffs (Pacific Agri-Prods.) (Bruno's) (Triple J) :
Ron Moroni, Esq.
P.O. Box 1618
Kolonia, Pohnpei FM 96941

For the Plaintiffs:

(NBK Corp.)
John Hollinrake, Esq.
Law Offices of Hollinrake & Saimon
Stephen V. Finnen, Esq.

(Bank of Hawaii)
Law Offices of Saimon & Associates
P.O. Box 1450
Kolonia, Pohnpei FM 96941

For the Plaintiff (Coca-Cola):
Michael A. White, Esq.
White, Pierce, Mailman & Nutting
P.O. Box 5222
Saipan, Mariana Islands MP 96950

For the Defendant:
Delson Ehmes, Esq.
P.O. Box 1018
Kolonia, Pohnpei FM 96941

* * * *

HEADNOTES

Business Organizations - Cooperatives; Debtors' and Creditors' Rights
A cooperative may be dissolved administratively by the FSM Registrar of Corporations and trustees appointed to wind up the cooperative's affairs. In re Kolonia Consumers Coop. Ass'n[2000] FMSC 1; , 9 FSM Intrm. 297, 300 (Pon. 2000).

Business Organizations - Cooperatives; Civil Procedure - Injunctions; Debtors' and Creditors' Rights
All violations of the FSM Regulations under which the FSM Registrar of Corporations may appoint trustees in dissolution for winding up an association's affairs are enjoinable. In re Kolonia Consumers Coop. Ass'n[2000] FMSC 1; , 9 FSM Intrm. 297, 300 (Pon. 2000).

Business Organizations - Cooperatives; Civil Procedure - Consolidation
Cases involving a dissolved cooperative association may be consolidated and assigned a new docket number. In re Kolonia Consumers Coop. Ass'n[2000] FMSC 1; , 9 FSM Intrm. 297, 300 (Pon. 2000).

* * * *

COURT'S OPINION

MARTIN YINUG, Associate Justice:

By order entered September 9, 1999, in Civil Action 1995-010, Richmond Wholesale Meat Co. v. Kolonia Consumers Cooperative, this court directed that the dissolution of defendant Kolonia Consumers Cooperative Association ("KCCA"), would proceed administratively under Chapter 7 of the Corporations, Partnerships and Association Regulations, which are found at Volume I, Federated States of Micronesia Regulations, at 47 et seq. Previously, on June 4, 1998, the FSM Registrar of Corporations had issued a decree of dissolution appointing Mr. Santiago Joab, Mr Bumio Silbanuz, and Mr. Minoru Inada, as trustees in dissolution to wind up the affairs of KCCA. The decree provides in pertinent part that

I, Bellarmine Ioannis, in my capacity as Registrar of Corporations do hereby decree the dissolution of KCCA effective the date herein approved by the President and appoint the above named individuals to be trustees in dissolution to wind up the affairs of KCCA within a period of a year beginning the date of affirmance of this action by the President of the Federated States of Micronesia. Furthermore, the trustees shall wind up the cooperative association in accordance with applicable laws and with due care and diligence account for all transactions in dissolution in a report to be filed with the FSM Registrar of Corporations and President of the FSM prior to the expiration of the one year period.

The decree was approved by the President of the FSM on June 8, 1998, and thus the trustees had until June 8, 1999, to file their report with the FSM Registrar of Corporations.

On November 2, 1999, the plaintiff in Civil Action No. 1999-018, Coca-Cola Beverage Co. (Micronesia), Inc. v. Kolonia Consumers Cooperative Association, filed its Report with the court which recites that on September 14, 1999, plaintiff's counsel spoke with Mr. Minoru Inada, and that Mr. Inada stated that "he knew nothing regarding the status of KCCA or its assets."

On December 1, 1999, the plaintiff in Civil Action No. 1995-126, Bank of Hawaii v. Kolonia Consumers Cooperative Association, 1995-126, filed its Status Report to Court/Request for Status Conference, in which plaintiff recited that it had "not had any contact whatsoever from these gentlemen [i.e., the trustees] concerning the dissolution of KCCA." The court in that case had on October 13, 1999, ordered the trustees to tender a copy of the report in dissolution required by the decree of dissolution no later than five days after service of the order upon them.

Part 6.6 of Chapter 7 of Title 37 of FSM Regulations sets forth the administrative procedures under which the FSM Registrar of Corporations may appoint trustees in dissolution for the winding up of the affairs of an association. Such was the procedure followed in this case. Part 6.12 further provides "all violations of this chapter are hereby declared to be enjoinable."

Mr. Santiago Joab, Mr. Bumio Silbanuz, and Mr. Minoru Inada will have until Wednesday, January 19, 1999, to demonstrate to the court by written submission that they have been fulfilling their duties as trustees in dissolution with the "due care and diligence" required of them by the decree of dissolution. If they fail to do so, then the court under part 6.12 of Chapter 7 of Title 37 will order them to be relieved of their duties as trustees, and will ask the creditors to submit the names of candidates who would be prepared to act as a diligent and careful receiver in this matter. The court directs the National Justice Ombudsman, Mr. Benjamin Rodriguez, to personally serve a copy of this order upon each of the trustees.

For all further purposes, these cases are consolidated. The clerk of court will assign a new case number, and the cases as consolidated will proceed under the caption "In Re Kolonia Consumers Cooperative Association." The consolidated case will be set for a status conference on the next occasion that the court schedules a sitting in Pohnpei.