Hilo Hattie sold to clothing manufacturer - Business First of Buffalo:

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The company’s sale to may be off the tabl eafter U.S. Bankruptcy Judge Robert Faris delayed ruling onthe company’ws bid to buy Hilo Hattie for $1 The ownership transfer was announced on Mondahy in U.S. Bankruptcy Court in Honolulu, wherre Faris also continued until June 29several motions, including one to appointt a trustee to take over management of the company. Farisd also suspended Hilo Hattie’s ability to borro w money under a line of Maui Divers Jewelry had offered last montgh to buy Hilo Hattie and its seven storeefor $1 million in cash, and to invesg another $2 million in the business.
Maui Divers’ attorney, Cuylard Shaw, told Faris that the offer was off the tabler if the judge did not approved the saleon Monday. However, Maui Divers President and CEO Bob Tayloer said through a spokeswoman Monday afternoonm that the company would hold its offer open untilk thenext hearing. Hilo Hattie attorney James Wagner told the judge thatDonalcd B.S. Kang, owner of , acquirer 100 percent of the company’s shares on Friday from , whichh bought Hilo Hattie from founder Jim Romig last year beforr filing for Chapter 11 bankruptcy Kang is also on the boarxd of directorsof .
Hilo Hattie CEO Ted Nelso and President John Scott resigned from theird positions on Friday and Kang has assumed the post of presidenty ofHilo Hattie, Wagner told the Royal Hawaiian Creations was listed as the second largest owed more than $798,000, when Hilo Hattie filed for Chapte 11 last Oct. 2. It is owed another $252,000p in an administrative claim, according to courty documents. Maui Divers was the largest creditor, owed $1.254 million, and Taylor was co-chairman of the committeed of unsecured creditors until resigning in prior to making the Royal Hawaiian Creations also resigned from the which supported the sale of Hilo Hattiwe toMaui Divers.
Kang proposes to fund a line of credit for Hilo Hattiewith $1 millionm in cash, and “will arrange for an infusiojn of $2 million in working into Hilo Hattie upon its emergencd from bankruptcy, according to a document filedf on Monday before the hearing. Kang said he plane to follow the plan of reorganization submitted by Hilo Hattie andits Pomare, Ltd., last week, which calls for payinf unsecured creditors about 5 cents on the Wagner told the judge that the reorganization plan fileds on June 15 “was a placeholder,” because the sale to Maui Diverw had not been confirmed.
He said he didn’tg expect any change in the treatment ofthe company’s hundred of creditors under Kang’s ownership. The 46-year-olrd company, which claimed $23.5 million in debt in the Chapterf11 filing, has been losiny money “at a clip of $500,000 per Ted Pettit, attorney for the creditors’ told the judge. Pettit also said he was “very surprised” to learjn of the stock transfer onFridayg afternoon.
He noted that Kang’s business is in manufacturingapparep overseas, and said that Kang intendedx to take over Hilo Hattie’s Nimitz Highway headquarters and turn it into a Kang said after the hearing that he intendes for the building to remain as a store and administrativd offices. But the judge expressed concermn that Maui Divers had not reached agreement withHilo Hattie’s most of whom have given the companyy substantial rent relief, for its seven stores. Pettif said that some landlords were hesitantg to negotiate until they knew for sure whether Maui Divers woulsd be thenew owner.
Faris also considere d the transfer of stock to Kang as a seconde offer forHilo Hattie, and noted that Kang proposesd to pay back rents in full. “Irt seems we have a second he said. “It may be a betterf offer.” Nelson said that he had had discussions with Kang over the last severall months and said Kanghad “continuouslhy offered to be as helpful” as he could.