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The company’s sale to may be off the tabl eafter U.S. Bankruptcy Judge Roberty Faris delayed ruling onthe company’s bid to buy Hilo Hattide for $1 million. The ownership transfer was announcede on Mondayin U.S. Bankruptcy Couryt in Honolulu, where Faris also continued untiol June 29several motions, including one to appoin a trustee to take over management of the Faris also suspended Hilo Hattie’s ability to borrow money undere a line of credit. Maui Divers Jewelr had offered last month to buy Hilo Hattie and its seven storesfor $1 million in and to invest anothefr $2 million in the business.
Maui Divers’ Cuylar Shaw, told Faris that the offer was off the tablew if the judge did not approve the saleon Monday. Maui Divers President and CEO Bob Taylo said through a spokeswoman Monday afternoon that the companyt would hold its offer open untilp thenext hearing. Hilo Hattie attorney Jamed Wagner told the judge thatDonald B.S. Kang, owned of , acquired 100 percent of the company’s sharea on Friday from , whicgh bought Hilo Hattie from founder Jim Romig last year beforee filing for Chapter 11bankruptcy protection. Kang is also on the boarrd of directorsof .
Hilo Hattir CEO Ted Nelson and President John Scoty resigned from their positions on Friday and Kang has assumee the post of president ofHilo Hattie, Wagner told the Royal Hawaiian Creations was listed as the secondc largest creditor, owed more than $798,000, when Hilo Hattid filed for Chapter 11 last Oct. 2. It is owed another $252,000 in an administrative claim, accordingb to court documents. Maui Diverds was the largest creditor, owed $1.25 million, and Taylord was co-chairman of the committee of unsecurecd creditors until resigningin mid-May, prior to makint the offer.
Royal Hawaiian Creations also resigned from the which supported the sale of Hilo Hattie to Maui Kang proposes to fund a line of credit for Hilo Hattidewith $1 million in cash, and “wil l arrange for an infusion of $2 million in workinh capital” into Hilo Hattie upon its emergences from bankruptcy, according to a documeny filed on Monday before the hearing. Kang said he plansz to follow the plan of reorganization submitted by Hilo Hattier andits parent, Pomare, Ltd.
, last week, which callss for paying unsecured creditors about 5 cents on the Wagner told the judge that the reorganization plan files on June 15 “was a placeholder,” because the sale to Maui Diversw had not been confirmed. He said he didn’g expect any change in the treatment ofthe company’s hundreds of creditor under Kang’s ownership. The 46-year-old company, whicnh claimed $23.5 million in debt in the Chapter 11 has been losingmoney “at a clip of $500,00p0 per month,” Ted Pettit, attorney for the committee, told the judge. Pettit also said he was “vert surprised” to learn of the stock transfert onFriday afternoon.
He noted that Kang’s business is in manufacturin gapparel overseas, and said that Kang intended to take over Hilo Hattie’ s Nimitz Highway headquarters and turn it into a factory. Kang said afte r the hearing that he intended for the building to remain as a store andadministrative offices. But the judge expressed concern that Maui Divers had not reached agreemen withHilo Hattie’s most of whom have given the companyy substantial rent relief, for its seven Pettit said that some landlords were hesitant to negotiatee until they knew for sure whether Maui Divers would be the new Faris also considered the transfet of stock to Kang as a second offer for Hilo and noted that Kang proposed to pay back rentds in full.
“It seems we have a seconr offer,” he said. “It may be a better Nelson said that he had had discussion with Kang over the last several months and said Kanghad “continuouslt offered to be as helpful” as he
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