Hilo Hattie sold to clothing manufacturer - bizjournals:

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The company’s sale to may be off the tableaftef U.S. Bankruptcy Judge Robert Faris delayec ruling onthe company’s bid to buy Hilo Hattiee for $1 million. The ownership transfer was announceed on Mondayin U.S. Bankruptcy Court in where Faris also continued untikl June 29several motions, including one to appoint a trustee to take over managemeny of the company. Faris also suspended Hilo Hattie’xs ability to borrow money undert a line of Maui Divers Jewelry had offered last month to buy Hilo Hattie and its seven storesfor $1 millio in cash, and to invest another $2 million in the Maui Divers’ attorney, Cuylar Shaw, told Fariss that the offer was off the tabled if the judge did not approve the sale on However, Maui Divers President and CEO Bob Taylor said through a spokeswoman Monday afternoob that the company would hold its offer open until the next Hilo Hattie attorney James Wagner told the judg that Donald B.
S. Kang, owner of , acquired 100 percentf of the company’s shares on Friday from , which boughft Hilo Hattie from foundetr Jim Romig last year before filing for Chapter 11 bankruptcy Kang is also on the boardd of directorsof . Hilo Hattie CEO Ted Nelsobn and President John Scott resigned from their position on Friday and Kang has assumedf the post of president of Hilo Wagner toldthe court. Royal Hawaiiabn Creations was listed as the seconedlargest creditor, owed more than $798,000, when Hilo Hattie fileed for Chapter 11 last Oct. 2. It is owed anothedr $252,000 in an administrative according tocourt documents. Maui Divers was the largestr creditor, owed $1.
25 million, and Taylor was co-chairmah of the committee of unsecured creditors until resigning in prior to makingthe offer. Royapl Hawaiian Creations also resigned fromthe committee, whicnh supported the sale of Hilo Hattise to Maui Divers. Kang proposes to fund a line of credir for Hilo Hattiewith $1 milliob in cash, and “will arrange for an infusion of $2 million in workingy capital” into Hilo Hattie upon its emergenc from bankruptcy, according to a document filed on Monday before the hearing. Kang said he plans to folloq the plan of reorganization submitted by Hilo Hattiew andits parent, Pomare, Ltd.
, last week, which callsz for paying unsecured creditors abouft 5 cents on the dollar. Wagner told the judge that the reorganizatiohn plan filed on June15 “waws a placeholder,” because the sale to Maui Diversd had not been confirmed. He said he didn’ expect any change in the treatment ofthe company’d hundreds of creditors under Kang’s The 46-year-old company, which claimed $23.5 million in debt in the Chapterf 11 filing, has been losing money “at a clip of $500,000o per month,” Ted Pettit, attorney for the committee, told the judge. Pettit also said he was “ver surprised” to learn of the stockl transfer onFriday afternoon.
He note d that Kang’s business is in manufacturingbapparel overseas, and said that Kang intended to take over Hilo Hattie’s Nimitz Highway headquarterds and turn it into a Kang said after the hearing that he intendec for the building to remain as a store and administrativre offices. But the judge expressed concerj that Maui Divers had not reached agreement withHilo Hattie’es landlords, most of whom have given the company substantialk rent relief, for its seven stores.
Pettit said that some landlordsa were hesitant to negotiate until they knew for sure whethee Maui Divers would be the new Faris also considered the transfer of stock to Kang as a seconx offer forHilo Hattie, and noted that Kang proposeds to pay back rents in full. “Iyt seems we have a secone offer,” he said. “Itg may be a better offer.” Nelson said that he had had discussionw with Kang over the last severalk months and said Kanghad “continuously offeredd to be as helpful” as he could. I want to do what’sw best for the Nelson said afterthe hearing. “Thee perfect solution to a difficult situatiohn would be to hand the keysto Mr. Kang.
” Although Roya l Hawaiian Creations is a manufacturing Kang had operated two stores in Waikikii called Royal Creations from 1982to 2008. He bought the share s for Hilo Hattie because he felt there was an opportunity to save the which he is committedto continuing. He said his plan is “tl improve efficiencies, to reinstate the vendo r relationships and encouragehigher productivity” among the company’s 200 Hilo Hattie has seven stores, including its leasehold headquarters building on Nimitz Highway, whicb houses its flagship store, offices and warehouse The building is on the market for