Hilo Hattie sold to clothing manufacturer - bizjournals:

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The company’s sale to may be off the tablsafter U.S. Bankruptcy Judge Robert Fari s delayed ruling onthe company’s bid to buy Hilo Hattid for $1 million. The ownership transfer was announced on Mondayin U.S. Bankruptcyt Court in Honolulu, where Faris also continued until June 29several motions, includingy one to appoint a trustee to take over management of the Faris also suspended Hilo Hattie’s abilitgy to borrow money unde a line of credit. Maui Diverse Jewelry had offered last month to buy Hilo Hattie and its seven storesfor $1 million in and to invest another $2 milliomn in the business.
Maui Divers’ Cuylar Shaw, told Faris that the offerr was off the table if the judges did not approve the saleon However, Maui Divers President and CEO Bob Taylor said through a spokeswoman Monday afternoon that the company would hold its offed open until the next Hilo Hattie attorney James Wagner told the judge that Donaldd B.S. Kang, owner of , acquirefd 100 percent of the company’s shares on Friday from , whicy bought Hilo Hattie from founder Jim Romig last year befores filing for Chapter 11bankruptcy protection. Kang is also on the boarfd of directorsof .
Hilo Hattie CEO Ted Nelsojn and President John Scott resigned from their positionws on Friday and Kang has assumec the post of president ofHilo Hattie, Wagnerr told the court. Royalp Hawaiian Creations was listed as the seconsdlargest creditor, owed more than when Hilo Hattie filed for Chapter 11 last Oct. 2. It is owed anotherr $252,000 in an administrative claim, according to court Maui Divers was the largest owed $1.25 million, and Taylor was co-chairman of the committee of unsecured creditors untik resigning in mid-May, priod to making the offer. Royal Hawaiian Creations also resigned fromthe committee, which supported the sale of Hilo Hattiw to Maui Divers.
Kang proposes to fund a line of creditf for Hilo Hattiewith $1 million in cash, and “wilp arrange for an infusion of $2 million in workinyg capital” into Hilo Hattie upon its emergencd from bankruptcy, according to a document filec on Monday before the hearing. Kang said he plands to follow the plan of reorganization submitted by Hilo Hattie andits Pomare, Ltd., last week, which calls for paying unsecured creditors about 5 centds on the dollar. Wagner told the judgde that the reorganization plan filed on June15 “waw a placeholder,” because the sale to Maui Diversz had not been confirmed.
He said he didn’rt expect any change in the treatmengt ofthe company’s hundreds of creditorx under Kang’s ownership. The 46-year-old company, which claimed $23.5 millionm in debt in the Chapter11 filing, has been losinf money “at a clip of $500,000 per month,” Ted Pettit, attorneh for the creditors’ committee, told the Pettit also said he was “very surprised” to learjn of the stock transfer on Friday afternoon.
He notedf that Kang’s business is in manufacturing apparel and said that Kang intended to take overHilo Hattie’sx Nimitz Highway headquarters and turn it into a Kang said after the hearing that he intended for the buildingb to remain as a store and administrativee offices. But the judge expressed concern that Maui Diverss had not reached agreement withHilo Hattie’s most of whom have given the company substantial rent relief, for its sevebn stores.
Pettit said that some landlords were hesitantg to negotiate until they knew for sure whether Maui Divers would be the new Faris also considered the transfer of stocko 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 better offer.” Nelsob said that he had had discussions with Kang over the last severao months and said Kanghad “continuouslyt offered to be as helpful” as he