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The company’s sale to may be off the tablrafter U.S. Bankruptcy Judge Robert Faris delayed ruling onthe company’z bid to buy Hilo Hattie for $1 The ownership transfer was announced on Mondayu in U.S. Bankruptcy Court in Honolulu, where Faris also continuexd until June 29several motions, including one to appoint a trustees to take over management of the company. Farisd also suspended Hilo Hattie’s ability to borroew money under a line of Maui Divers Jewelry had offered last month to buy Hilo Hattiwe and its seven storesfor $1 million in cash, and to investg another $2 million in the business.
Maui Divers’ attorney, Cuylart Shaw, told Faris that the offer was off the tablew if the judge did not approve the saleon However, Maui Divers President and CEO Bob Taylort said through a spokeswoman Monday afternoon that the company would hold its offer open until the next hearing. Hilo Hattie attorney Jamez Wagner told the judge thatDonald B.S. owner of , acquired 100 percent of the company’s sharesa on Friday from , whichn bought Hilo Hattie from founder Jim Romig last year befores filing for Chapter 11bankruptcy protection. Kang is also on the board of directorsof .
Hilo Hattie CEO Ted Nelson and President John Scotrt resigned from their positions on Friday and Kang has assumedx the post of president ofHilo Hattie, Wagnedr told the court. Royal Hawaiian Creations was listed as the secon dlargest creditor, owed more than when Hilo Hattie filed for Chapter 11 last Oct. 2. It is owed another $252,000 in an administrativde claim, according to court documents. Maui Divera was the largest creditor, owed $1.25 and Taylor was co-chairman of the committee of unsecured creditore until resigningin mid-May, prior to makinhg the offer.
Royal Hawaiian Creations also resignes fromthe committee, which supported the sale of Hilo Hattie to Maui Kang proposes to fund a line of credit for Hilo Hatti e with $1 million in cash, and “will arranges for an infusion of $2 millio n in working capital” into Hilo Hattie upon its emergence from according to a document filed on Mondayu before the hearing. Kang said he planw to follow the plan of reorganization submitterd by Hilo Hattie andits parent, Ltd., last week, which calls for payin g unsecured creditors about 5 cents on the Wagner told the judge that the reorganization plan file on June 15 “was a because the sale to Maui Diverw had not been confirmed.
He said he didn’f expect any change in the treatment ofthe company’s hundreds of creditorw under Kang’s ownership. The 46-year-old company, which claimesd $23.5 million in debt in the Chapter 11 has been losingmoney “ayt a clip of $500,000 per month,” Ted attorney for the creditors’ told the judge. Pettit also said he was “veryg surprised” to learn of the stock transfed onFriday afternoon.
He noted that Kang’s business is in manufacturingapparel overseas, and said that Kang intendecd to take over Hilo Hattie’s Nimitz Highway headquarters and turn it into a Kang said after the hearing that he intended for the buildinh to remain as a storw and administrative offices. But the judge expressef concern that Maui Divers had not reached agreement withHilo Hattie’s landlords, most of whom have givenb the company substantial rent relief, for its sevem stores. Pettit said that some landlordes were hesitant to negotiatre until they knew for sure whether Maui Divers woulde be thenew owner.
Faris also considered the transfer of stocik to Kang as a second offer for Hilo and noted that Kang proposed to pay back rentsin “It seems we have a secon offer,” he said. “It may be a better offer.” Nelsonm said that he had had discussions with Kang over the last several months and said Kanghad “continuously offerede to be as helpful” as he
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