May 20, 2009
Maui Divers offers $1M for Hilo Hattie - Pacific Business News (Honolulu):
Maui Divers Jewelry has offered to buy bankrupt retailer Hilo Hattie for $1 million.
The company’s offer was accepted Tuesday by the committee of unsecured creditors in Hilo Hattie’s Chapter 11 bankruptcy reorganization case.
Honolulu-based Maui Divers, which operates jewelry concessions inside the seven Hilo Hattie stores, is the largest creditor on the committee and is owed some $1.25 million, which it had given Hilo Hattie last fall as an advance on future rent. Maui Divers President and CEO Bob Taylor was a co-chairman of the committee until he resigned last week.
The committee, which includes longtime vendors, trading partners and former executives of Hilo Hattie who are owed tens of thousands of dollars, had asked the court last month to appoint a trustee to take over management of the company. But at a hearing last week, U.S. Bankruptcy Judge Robert Faris put off a decision until another hearing scheduled for June 22.
Maui Divers, which is privately owned and has 60 stores in Hawaii, California and Guam, has asked for an expedited hearing on the offer to buy Hilo Hattie, Taylor said.
The offer is contingent upon a number of conditions, including the successful negotiation of leases at all seven stores, and is subject to approval by the bankruptcy judge, according to Maui Divers’ letter of intent. If the deal is approved, Maui Divers plans to rehire most of Hilo Hattie’s 200 employees, invest a minimum of $2 million of working capital into operations and merchandise at the stores and keep most, if not all, of the local vendors who supply the merchandise.
“There is a lot of synergy between Maui Divers Jewelry and Hilo Hattie, including our shared history as small local manufacturing and retail operations that have grown to be internationally recognized brands,” Taylor said in a statement. “We’ve also enjoyed a long-standing partnership with Hilo Hattie since 2001 and have been true believers in their brand.”
Hilo Hattie CEO Ted Nelson did not immediately return a call seeking comment. Nelson is also a principal in TOC Inc., a group of California investors that bought the company from Hilo Hattie founder Jim Romig last year. TOC Inc. has not invested any capital into Hilo Hattie since purchasing the company last year.
Hilo Hattie closed its San Diego store in October, followed by its Orange, Calif., store and Sand Island warehouse in December. Its leasehold headquarters building on Nimitz Highway, which includes its flagship store, offices and warehouse space, is on the market for sublease.
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