SOUTH KONA, Hawaii – A reorganization plan submitted to U.S. Bankruptcy Court would allow the stalled Hokuli’a development to proceed, according to a media release issued by Current Events on behalf of the company that acquired the loans to the South Kona project.
According to the release, “Sun Kona Finance I LLC, the investment firm that acquired Bank of Scotland’s loans to the long-stalled Hokuli’a project and Debtors 1250 Oceanside Partners, Pacific Star Company LLC, and Front Nine, have submitted a Joint Consolidated Plan of Reorganization under Chapter 11 to the United States Bankruptcy Court in Hawaii.”
The Debtor entities have $68 million in assets but corresponding liabilities of $646 million, the release reports.
Sun Kona Finance I LLC is owned by two prominent investors: William A. Pope, owner and president of SunChase Holdings, inc – a company with an “extensive history of managing distressed real estate assets and loans both for itself and for third parties” – and by Samuel Robson Walton through his entity Lake Avenue Investments, LLC. Walton is Chairman of the Board of Directors of Walmart.
The New York restructuring firm of Marotta Gund Budd & Dzera was replaced when Sun Kona acquired the Bank of Scotland loans late last year. Sun Kona then installed Craig Pickett to manage the Debtor entities. 1250 Oceanside and its affiliates commenced Chapter 11 bankruptcy proceedings in March 2013. Long time Kona resident G. Rick Robinson was appointed Chief Restructuring Officer. The release says Robinson has been actively involved in the development of the plan.
The plan would permit the creditors to receive payment in excess of the liquidation value of their claims, according to the release, as well as move Hokuli’a forward.
In the release, Craig Pickett is quoted as saying the restructuring plan includes $20 million for the completion of Mamalahoa Bypass Highway, the amount 1250 Oceanside was obligated to provide for the important South Kona road. Prickett says the plan will also contribute over $1.5 million to “assist with construction of affordable housing , drug abuse prevention and scholarship initiatives.”
“Once approved,” stated Pickett, “(the plan will) transform Hokuli’a. We are anxious to move forward with development and completion of the project.”
The reorganization plan included the submission of a Development, Cultural and Community Plan that CRO Robinson says affirms the historical and cultural significance of the Kona lands. “The plan addresses the protection of cultural and historical sites, access rights of lineal and cultural descendants, the establishment of agricultural and cultural preserves and the importance of working collaboratively with Hawaii’s State Historical Preservation Division, descendants and others.”
The media release says the plan also calls for Sun Kona to fund a $65 million line-of-credit Exit Loan to cover debtors’ obligations to their creditors under the plan and to cover operating shortfalls moving forward.
There will be a hearing on the Plan’s Disclosure Statement on September 16.