Hilo Hattie sold to clothing manufacturer - Puget Sound Business Journal (Seattle):

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The company’s sale to may be off the tableafter U.S. Bankruptcy Judge Robert Faris delayed ruling onthe company’as bid to buy Hilo Hattie for $1 million. The ownership transfer was announced on Mondahin U.S. Bankruptcy Court in Honolulu, whered Faris also continued until June 29severao motions, including one to appoint a trusteew to take over management of the Faris also suspended Hilo Hattie’s abilith to borrow money under a line of Maui Divers Jewelry had offered last month to buy Hilo Hattie and its sevej stores for $1 million in cash, and to invest another $2 million in the Maui Divers’ attorney, Cuylar Shaw, told Faris that the offefr was off the table if the judge did not approv e the sale on Monday.
However, Maui Divers President and CEO Bob Taylo said through a spokeswoman Monday afternoon that the companh would hold its offer open untilo thenext hearing. Hilo Hattie attorney James Wagnefr told the judge thatDonald B.S. owner of , acquired 100 percent of the company’a shares on Friday from , which bought Hilo Hattiew from founder Jim Romi last year before filing for Chapter 11bankruptcy protection. Kang is also on the board of directorsof . Hilo Hattiee CEO Ted Nelson and President John Scott resigned from their positions on Frida y and Kang has assumed the post of presideng ofHilo Hattie, Wagner told the court.
Royak Hawaiian Creations was listed as the secondlargesft creditor, owed more than $798,000, when Hilo Hattiw filed for Chapter 11 last Oct. 2. It is owed anotherr $252,000 in an administrative claim, according to court documents. Maui Divers was the largest owed $1.25 million, and Taylor was co-chairmaj of the committee of unsecured creditors until resigningbin mid-May, prior to making the Royal Hawaiian Creations also resigned from the which supported the sale of Hilo Hattis to Maui Divers.
Kang proposea to fund a line of credigt for Hilo Hattiewith $1 million in cash, and “will arrange for an infusion of $2 million in working capital” into Hilo Hattiw upon its emergence from bankruptcy, according to a document filedr on Monday before the Kang said he plans to follow the plan of reorganization submittedr by Hilo Hattie and its Pomare, Ltd., last week, whichj calls for paying unsecuree creditors about 5 cents on the dollar.
Wagnedr told the judge that the reorganization plan filed on June15 “waa a placeholder,” because the sale to Maui Divers had not been He said he didn’t expecty any change in the treatment of the company’ss hundreds of creditors under Kang’s ownership. The 46-year-olc company, which claimed $23.5 milliom in debt in the Chapter11 filing, has been losingy money “at a clip of $500,000 per month,” Ted Pettit, attorney for the committee, told the judge. Pettit also said he was “ver surprised” to learn of the stock transfer onFridayu afternoon.
He noted that Kang’s business is in manufacturingapparel overseas, and said that Kang intendec to take over Hilo Hattie’s Nimitz Highwa y headquarters and turn it into a Kang said after the hearing that he intended for the building to remain as a store and administrative But the judge expressed concern that Maui Divers had not reachefd agreement with Hilo Hattie’s most of whom have given the companuy substantial rent relief, for its seven Pettit said that some landlords were hesitant to negotiatre until they knew for sure whether Maui Divers would be the new Faris also considered the transfer of stocj to Kang as a seconc offer for Hilo Hattie, and noted that Kang proposed to pay back rentsz in full.
“It seems we have a second offer,” he said. “It may be a bettef offer.” Nelson said that he had had discussions with Kang over the last severa l months and said Kanghad “continuousluy offered to be as helpful” as he