News Release

A.B. Won Pat International Airport Authority, Guam Opposes Any Further Delay by DFS of Judgement Against Guam Airport

Monday, February 26, 2018

February 26, 2018 – Tamuning, Guam – In its latest court filing, DFS Guam L.P. ("DFS") admits that the final judgment granting the relief it ultimately asked for in DFS Guam L.P. v. A.B. Won Pat International Airport Authority, Guam is actually deeply flawed and bad for Guam.

GIAA has already appealed the judgment to the Guam Supreme Court. But rather than allow the Supreme Court to review Judge Barcinas's decision, DFS now asks Judge Barcinas for a "do- over." DFS's motion will only make the judgment worse for Guam and further delay the end of this seemingly never-ending litigation.

"DFS got exactly what it asked for from the Court – a final judgment that GIAA never actually had a contract with Lotte because the wrong procurement process was used – based on narrow and incorrect readings of the Guam Procurement Law that were advanced by DFS," said Genevieve Rapadas, legal counsel for the Antonio B. Won International Airport Authority, Guam ("GIAA"). "DFS now understands the extraordinary unintended consequences of that decision and admits that Judge Barcinas's decision is ‘flawed.' But DFS's motion will not fix the flaws. Judge Barcinas's decisions also do not support further harming GIAA or punishing Lotte. Judge Barcinas never ruled that Airport officials acted unethically or that Lotte behaved improperly in the procurement process. Nor could he have after ruling, at DFS's request, that the procurement process must be treated as if it never happened."

GIAA will continue to respectfully urge Judge Barcinas to step back and allow the Guam Supreme Court to review his decision. That decision took the drastic and unprecedented step of voiding a critical $154 million public contract and undermining the financial stability of the Airport. GIAA is confident that it will prevail in its appeal and that the Supreme Court will affirm the validity of GIAA's contract with Lotte.

"When the Guam Supreme Court finally examines the record and the documents produced during discovery over the past five years, we believe the Court will see that DFS made a strategic decision not to follow the Procurement Law by holding off filing any protest for several months past the protest deadline based on its belief that it was going to be the successful proposer in the end," said Ms. Rapadas. "This litigation was never about anything other than DFS's self-interest and profits," continued Ms. Rapadas.

The Airport believes that through this five year-long "scorched earth litigation" DFS has used its substantial resources to scare off future competition and devalue the Airport duty free concession. DFS held the Airport duty free concession exclusively for over 30 years before Lotte was selected in 2013 in the Airport's first real competitive procurement for the concession. Shilla Duty Free (a subsidiary of Samsung) finished second and DFS was ranked third.

"It's not hard to see that the Lotte contract has been a huge success for GIAA and the people of Guam," said GIAA Executive Manager Charles H. Ada II. "Just look at the numbers – $70 million in revenue so far, over $20 million in capital improvements, a $247 million bond issue that is financing the construction of the $110 million arrivals floor. Our audits are clean, our bond rating stable and we've received perfect safety ratings from the FAA for the last two years. We're the only Airport in the Pacific Region that has achieved this."

"It would be tragic for the financial future of the Airport to be put at risk by an erroneous judgment," concluded Ada. "We're looking forward to the Guam Supreme Court's review of the case."

For any questions, please contact Genevieve Rapadas at 646-9355 or [email protected]