Categorized | Business

Restructuring plan for Hokulia turnaround accepted

MEDIA RELEASE

Transformation of the stalled Hokulia luxury development on the Kona Coast of Hawaii Island is one step closer.

The first hearing to review the restructuring plan for Debtors 1250 Oceanside Partners, Pacific Star Company LLC, and Front Nine, was recently held in the U.S. Bankruptcy Court in Honolulu.

The restructuring plan has been proposed by the Debtors and their lender, Sun Kona Finance I, LLC.

Bankruptcy Judge Robert J. Faris concluded the Disclosure Statement proposed by the plan proponents adequately and sufficiently detailed the restructuring plan and pertinent circumstances.

The Bankruptcy Code requires such a disclosure statement that provides detailed information for claims holders to make informed decisions, before the plan itself can be considered for approval.

The proposed reorganization plan would allow Hokulia to proceed and permit creditors to receive payment in excess of the liquidation value of their claims. Sun Kona Finance I, LLC plans to fund a $65 million line-of-credit Exit Loan to satisfy the debtors’ obligations under the plan and to provide for operating shortfalls moving forward.

The Hokulia debtors and debtors-in-possession could emerge from bankruptcy as early as February 2014.

“We have been working diligently on a restructuring and financing plan that addresses past obligations, including a $20 million commitment to the County of Hawaii,” stated the President of Oceanside’s general partner. “Once Hokulia emerges from bankruptcy, our funding will be in place to complete the Mamalahoa Bypass Highway, a road that communities in South Kona have waited so long for.”

The development, cultural and community plan submitted with the reorganization plan expands environmental protections, protects cultural and historical sites, provides access to lineal and cultural descendants, establishes both agricultural and cultural preserves and is contingent on working collaboratively with the State Historic Preservation Division, descendants and others.

Hokulia Entities

Debtors in Bankruptcy

* 1250 Oceanside Partners, the developer of Hokulia owns lots and the remaining undeveloped areas

* Front Nine LLC owns lots at Hokulia

* Pacific Star Company LLC is the owner of the adjoining Keopuka property

All three entities are in bankruptcy, have limited or no activities, and are not conducting any construction work.

Associations

There are a number of associations within the Hokulia Development that do not fall under Sun Kona, Oceanside, Front Nine or Pacific Star including The Club at Hokulia, Hokulia Community Association, and Hokulia Park and Cultural Sites Association.

These are not in bankruptcy, are controlled by various individual lot owners and have independent management and boards of directors.

The Club at Hokulia controls the golf course and amenities, Hokulia Community Association is in charge of the subdivision’s common areas and the Hokulia Park and Cultural Sites Association controls and manages the shoreline park, historic sites, burials and trails.

Sun Kona Venture, LLC, the entity that controls Sun Kona Finance I LLC, is owned by two prominent investors, William A. Pope, owner and President of SunChase Holdings and Samuel Robson (Rob) Walton, through one of his entities, Lake Avenue
Investments, LLC. Walton is chairman of the board of directors of Walmart.

SunChase Holdings, Inc. has invested, traded and operated extensive real estate holdings and has provided business capital to companies for more than 20 years.

SunChase has an extensive history of managing distressed real estate assets and loans both for itself and for third parties. The majority of SunChase projects are owned by the company; however certain of the projects include third party investors.

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