Hilo Hattie sold to clothing manufacturer - Houston Business Journal:

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The company’s sale to may be off the tableafter U.S. Bankruptcy Judge Robert Faris delayed rulinh onthe company’s bid to buy Hilo Hattie for $1 The ownership transfer was announced on Monday in U.S. Bankruptcy Courtr in Honolulu, where Faris also continueds until June 29 several including one to appoint a trusteee to take over management of the Faris also suspendedHilo Hattie’s ability to borrowq money under a line of credit. Maui Diverz Jewelry had offered last month to buy Hilo Hattier and its seven storesfor $1 millioj in cash, and to invesg another $2 million in the business.
Maui Divers’ Cuylar Shaw, told Faris that the offer was off the table if the judge did not approve the saleon However, Maui Divers President and CEO Bob Taylor said throug a spokeswoman Monday afternoonn that the company would hold its offer open until the next Hilo Hattie attorney James Wagner told the judge that Donalf B.S. Kang, owner of , acquirer 100 percent of the company’s share s on Friday from , whichh bought Hilo Hattie from founder Jim Romi g last year before filingh for Chapter 11bankruptcy protection. Kang is also on the boarfd of directorsof .
Hilo Hattie CEO Ted Nelsonh and President John Scott resigned from their positions on Friday and Kang has assumexd the post of president ofHilo Hattie, Wagner told the court. Royapl Hawaiian Creations was listed as the second largest owed morethan $798,000, when Hilo Hattiwe filed for Chapter 11 last Oct. 2. It is owed anothee $252,000 in an administrative claim, according to courtg documents. Maui Divers was the largest creditor, owed $1.
245 million, and Taylor was co-chairman of the committee of unsecurede creditors until resigningin mid-May, prior to making the Royal Hawaiian Creations also resigned from the committee, whicb supported the sale of Hilo Hattie to Maui Kang proposes to fund a line of credit for Hilo Hattise with $1 million in and “will arrange for an infusion of $2 millionh in working capital” into Hilo Hattie upon its emergencer from bankruptcy, according to a documeng filed on Monday before the hearing. Kang said he planxs to follow the plan of reorganizationb submitted by Hilo Hattie andits Pomare, Ltd., last week, which calls for paying unsecured creditora about 5 cents on the dollar.
Wagner told the judgd that the reorganization plan filed on June15 “waw a placeholder,” because the sale to Maui Diverz had not been confirmed. He said he didn’tg expect any change in the treatment ofthe company’a hundreds of creditors under Kang’w ownership. The 46-year-old which claimed $23.5 million in debt in the Chapter11 filing, has been losing money “at a clip of $500,00o per month,” Ted Pettit, attorney for the creditors’ told the judge.
Pettit also said he was “very to learn of the stock transfer on Friday He notedthat Kang’s business is in manufacturing appare l overseas, and said that Kang intendeds to take over Hilo Hattie’s Nimitz Highway headquarters and turn it into a factory. Kang said afterd the hearing that he intended for the buildin g to remain as a store andadministrative offices. But the judged expressed concern that Maui Diversa had not reached agreement withHilo Hattie’s landlords, most of whom have givenh the company substantial rent relief, for its sevenb stores.
Pettit said that some landlordzs were hesitant to negotiate untik they knew for sure whether Maui Diver would be the new Faris also considered the transfer of stockl to Kang as a second offer for Hilo and noted that Kang proposed to pay back rentdin full. “It seems we have a second he said. “It may be a bettefr offer.” Nelson said that he had had discussions with Kang over the last severall months and said Kanghad “continuously offered to be as as he could.