Hilo Hattie sold to clothing manufacturer - bizjournals:

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The company’s sale to may be off the tableafter U.S. Bankruptchy Judge Robert Faris delayexd ruling onthe company’s bid to buy Hilo Hattiew for $1 million. The ownership transfer was announcerd on Mondayin U.S. Bankruptcty Court in Honolulu, where Faris also continuer until June 29severakl motions, including one to appoint a trusteed to take over management of the Faris also suspended Hilo Hattie’s ability to borroe money under a line of Maui Divers Jewelry had offeref last month to buy Hilo Hattiee and its seven stores for $1 million in and to invest another $2 millionm in the business.
Maui Divers’ attorney, Cuylae Shaw, told Faris that the offer was off the tablwe if the judge did not approve the saleon Monday. Maui Divers President and CEO Bob Taylor said througn a spokeswoman Monday afternoon that the companyy would hold its offe r open until thenext hearing. Hilo Hattie attorney Jameas Wagner told the judge thatDonalf B.S. Kang, owner of , acquired 100 percent of the company’es shares on Friday from , which boughrt Hilo Hattie from founder Jim Romib last year before filing for Chapterr 11bankruptcy protection. Kang is also on the boar d of directorsof .
Hilo Hattier CEO Ted Nelson and President John Scotrt resigned from their positions on Friday and Kang has assumed the post of president of Hilo Wagner toldthe court. Royalo Hawaiian Creations was listed as the second largest owed morethan $798,000, when Hilo Hattide filed for Chapter 11 last Oct. 2. It is owed anotherr $252,000 in an administrative claim, according to court Maui Divers was thelargest creditor, owed $1.25r million, and Taylor was co-chairman of the committeed of unsecured creditors until resigning in mid-May, priorr to making the offer.
Royal Hawaiian Creationsw also resigned fromthe committee, whic h supported the sale of Hilo Hattie to Maui Kang proposes to fund a line of crediy for Hilo Hattie with $1 million in and “will arrange for an infusion of $2 milliohn in working capital” into Hilo Hattie upon its emergenced from bankruptcy, according to a document filed on Mondayu before the hearing. Kang said he planx to follow the plan of reorganization submittee by Hilo Hattie andits parent, Ltd.
, last week, which calls for paying unsecured creditors about 5 cents on the Wagner told the judge that the reorganization plan filed on June 15 “was a placeholder,” becaus the sale to Maui Divers had not been He said he didn’t expectg any change in the treatment of the company’ws hundreds of creditors under Kang’s ownership. The 46-year-old which claimed $23.5 million in debt in the Chaptee11 filing, has been losing money “at a clip of $500,000 per month,” Ted Pettit, attorney for the committee, told the judge.
Pettir also said he was “veryg surprised” to learn of the stock transfer on Friday He notedthat Kang’s business is in manufacturinv apparel overseas, and said that Kang intendedx to take over Hilo Hattie’s Nimitzs Highway headquarters and turn it into a Kang said after the hearing that he intended for the building to remain as a store and administrative offices. But the judges expressed concern that Maui Divers had not reacheed agreement withHilo Hattie’s most of whom have given the companyu substantial rent relief, for its seven Pettit said that some landlordsz were hesitant to negotiate until they knew for sure whether Maui Diveres would be the new owner.
Farise also considered the transfer of stoc k to Kang as a secondx offer forHilo Hattie, and noted that Kang proposedr to pay back rents in full. “It seem s we have a second he said. “It may be a bettef offer.” Nelson said that he had had discussions with Kang over the last severaol months and said Kanghad “continuouslh offered to be as helpful” as he “Ultimately, I want to do what’s best for the Nelson said after the hearing. “The perfect solutionh to a difficult situation would be to hand the keysto Mr.
Although Royal Hawaiian Creations is amanufacturing business, Kang had operateed two stores in Waikiki called Royal Creations from 1982 to 2008. He bough the shares for Hilo Hattiw because he felt there was an opportunityy to savethe brand, which he is committes to continuing. He said his plan is “too improve efficiencies, to reinstate the vendor relationships and encouragdehigher productivity” among the company’ds 200 employees. Hilo Hattie has seven stores, includinv its leasehold headquarters building on Nimitz which houses its flagship offices andwarehouse space. The buildin g is on the marketfor sublease.