Categorized | Business

Reorganization plan filed to revive Hokulia development

MEDIA RELEASE

Sun Kona Finance I LLC, the investment firm that acquired Bank of Scotland’s loans to the long‐stalled Hokulia 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 U.S. Bankruptcy Court in Hawaii.

A hearing on the plan’s disclosure statement has been scheduled for Sept. 16, 2013. The debtor entities have $68 million in assets but corresponding liabilities of $646 million.

Sun Kona Finance I LLC acquired Bank of Scotland’s loans late last year and replaced the New York restructuring firm of Marotta Gund Budd & Dzera.

Craig Pickett was installed by Sun Kona Finance I LLC to manage the debtor entities. In order to resolve secured and unsecured debt in accordance with the Bankruptcy Code, 1250 Oceanside and its affiliates commenced Chapter 11 bankruptcy proceedings in March 2013.

In May, the Bankruptcy Court authorized the debtors to appoint G. Rick Robinson, a long‐time Kona resident, as chief restructuring officer. Robinson has been actively involved in the development of the plan.

The proposed reorganization plan would allow the stalled Hokulia project to proceed and permit the respective creditors to receive payment in excess of the liquidation value of their claims.

“We have a restructuring plan and financing in place that, once approved by the Court, will transform Hokulia,” Pickett said. “We are anxious to move forward with development and completion of the project. We also are keenly aware of the importance of the Mamalahoa Bypass Highway to the Kona community and our plan will address Oceanside’s $20 million obligation to the county, assuring the availability of these funds to complete the
highway.”

“The development, cultural and community plan submitted with the reorganization plan affirms the historical and cultural significance of these lands,” Robinson said. “The plan addresses the protection of cultural and historic 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 Historic Preservation Division, descendants and others.”

West Hawaii’s community needs are also addressed within the development, cultural and community plan.

“Sun Kona is embarking on a new beginning at Hokulia,” Pickett said. “In addition to $20 million for completion of the Mamalahoa Bypass Highway, the restructuring plan also includes community
contributions of well over $1.5 million to assist with construction of
affordable housing, drug abuse prevention and scholarship initiatives.”

The plan also calls for Sun Kona Finance I LLC to fund a $65 million line‐of‐credit exit loan to cover the debtors’ obligations to their creditors under the plan and to cover operating shortfalls moving forward.

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 the 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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