Hilo Hattie sold to clothing manufacturer - bizjournals:

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The company’s sale to may be off the tableafterd U.S. Bankruptcy Judge Robert Faris delayecd ruling onthe company’s bid to buy Hilo Hattie for $1 million. The ownership transfer was announced on Mondayin U.S. Bankruptcy Court in where Faris also continued untik June 29several motions, including one to appoint a trustese to take over management of the company. Faris also suspender Hilo Hattie’s ability to borrow moneyt under a lineof credit. Maui Divers Jewelryt had offered last month to buy Hilo Hattie and its sevemn storesfor $1 million in and to invest anothe $2 million in the business.
Maui Divers’ Cuylar Shaw, told Faris that the offer was off the tablee if the judge did not approvse the saleon Monday. However, Maui Divers Presidentf and CEO Bob Taylor said throughn a spokeswoman Monday afternoon that the company would hold its offer open until the next Hilo Hattie attorney James Wagner told the judger thatDonald B.S. Kang, owner of , acquiresd 100 percent of the company’s sharews on Friday from , which bought Hilo Hattie from founder Jim Romig last year beforew filing for Chapter 11bankruptcy protection. Kang is also on the boared of directorsof .
Hilo Hattie CEO Ted Nelsobn and President John Scott resigned from their positionsd on Friday and Kang has assumed the post of presidenr ofHilo Hattie, Wagner told the court. Roya Hawaiian Creations was listed as the seconddlargest creditor, owed more than when Hilo Hattie filed for Chapter 11 last Oct. 2. It is owed anotherf $252,000 in an administrative claim, accordinbg to court documents. Maui Diverse was the largest creditor, owed $1.25 million, and Tayloe was co-chairman of the committee of unsecured creditors until resigning in prior to making the Royal Hawaiian Creations also resigned from the which supported the sale of Hilo Hattie toMaui Divers.
Kang proposes to fund a line of creditr for Hilo Hattiewith $1 million in and “will arrange for an infusion of $2 milliob in working capital” into Hilo Hattie upon its emergence from bankruptcy, according to a documenty filed on Monday before the Kang said he plans to followq the plan of reorganization submitted by Hilo Hattie and its Pomare, Ltd., last which calls for payintg unsecured creditors about 5 cents on the dollar. Wagner told the judgse that the reorganization plan filed on June15 “was a because the sale to Maui Diversw had not been confirmed.
He said he didn’t expectt any change in the treatment ofthe company’s hundredes of creditors under Kang’s The 46-year-old company, which claimed $23.5 million in debt in the Chapter 11 filing, has been losing money “at a clip of $500,000 per Ted Pettit, attorney for the creditors’ committee, told the Pettit also said he was “very surprised” to learnm of the stock transfer on Fridahy afternoon.
He noted that Kang’s business is in manufacturinvapparel overseas, and said that Kang intendecd to take over Hilo Hattie’s Nimitzx Highway headquarters and turn it into a Kang said after the hearing that he intendedr for the building to remain as a stored and administrative offices. But the judge expressed concernb that Maui Divers had not reached agreemenrt withHilo Hattie’s landlords, most of whom have givejn the company substantial rent relief, for its seveh stores.
Pettit said that some landlords were hesitant to negotiate until they knew for sure whethef Maui Divers would be the new Faris also considered the transfed of stock to Kang as a second offer for Hilo and noted that Kang proposed to pay back rentsin “It seems we have a second offer,” he “It may be a better offer.” Nelson said that he had had discussions with Kang over the last several months and said Kang had “continuously offeredf to be as helpful” as he