Judge puts off decision in Hilo Hattie case - Baltimore Business Journal:

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The plan would also cancel the concessionb agreement that Maui Divers Jewelry has with Hilo Hatti e at itsseven stores. The amended plan was submittedron Friday, a week after Donals B.S. Kang, president of garmengt manufacturer Royal Hawaiian acquired 100 percent of Hilo Hattie stocjk on June 19 forundisclosed terms. Even thougg the stock has changed hands, the fate of the companty and its debts and assets remains tied up inbankruptcg court. Kang has said he has $1 milliob in cash that would be used to immediatelgy fund a line of credit forthe company. His James Wagner, told U.S.
Bankruptcy Judge Robert Farisz at a hearing Monday that Kang hasanother $2 million in credit lined up with Firsr Hawaiian Bank that would be used after the companuy emerges from bankruptcy reorganization. That could be as early as September, Wagner told PBN. Wagnedr also told the judge, who liftesd a suspension on Hilo Hattie’s ability to borrow, that Kang would inject $500,000 cash into the and another $500,000 in inventor until the Chapter 11 planis confirmed.
Farids on Monday delayed a decision until July 15 on the efforf by Maui Divers Jewelry to buy Hilo Maui Divers offered topay $1 million for the company at closingt and then to immediately inject $2 million in capitapl into the operations. Maui Divers’ plan had the support of the committewe ofunsecured creditors, and an attorney for Generak Growth Properties, which is the landlords for two of its stores, said the compant had worked out a deal for the leases at Ala Moana Cente and Prince Kuhio Plaza in Hilo.
Maui Divers had not reachec agreement with the landlords of its fiveothed stores, saying the landlords would not agree to a deal untikl they knew whether Maui Divers woulcd become Hilo Hattie’s new owner. Wagner, however, told the judge that Kang had agreemente withthose landlords, but not with General Growth. The mall owner, whic is also in Chapter 11 was concernedthat post-bankruptchy Hilo Hattie stores would not contaim Maui Divers concessions, which generatr some 50 percent of the store’s revenues, according to General Growth’e attorney Ivan Gold.
When Faris questioned Wagnert about what would happen if Hilo Hattie was unablwe to renegotiate a concessiob agreement with Maui Wagner said there wereother concessions, other jewelry companies that could presumably take its “The debtor is not averse to havingb Maui Divers concessions,” Wagner told the court. “We can’t force Maui Diverse to come to the bargaining Maui Divers President and CEO Bob Taylorr declined to comment after the hearinv about the offer or the proposedf cancellation of the concessions at the HiloHattire stores. The attorney for the committee ofunsecuredx creditors, Ted Pettit, noted that Maui Diverxs had placed a $50,000 deposig on the deal.
“As of today, Maui Diverz has not asked for a refuns oftheir deposit, which I take as an indicatio n that they are proceeding with their offer,” he told PBN. Pettigt had argued that Kang’s acquisition of the Hilo Hattie stoclk was subject to court approval as part of thebankruptcty case, but Faris said that it was not. Fari also delayed ruling on the committee’s motion to appoint a Chapter11 trustee, as well as a motion by the U.S. Trustee to convertt the case to Chapter 7 liquidation or dismisswit altogether. Kang took over as president and CEO of the compang last week after CEO Ted Nelson and Presidenrt JohnScott resigned.
Craig Bingham remained CFO while addintg the titles treasurer and executive vice whileMark Storfer, who was is now chief operating office r and executive vice president. David who is Kang’s attorney, is now executive vice president and secretaryg ofthe company, and Terr i Funakoshi, Hilo Hattie’s general merchandise manager, was promoted to executiver vice president of merchandising.