However, an agreement between Pacific International Services Co. and the auto dealer's biggest creditor, Chrysler Financial Corp., says there will be no bankruptcy filing, at least for four months, and Chrysler will lend PISC money to cover some debts.
The debts include $50,000 to pay off loans that customers owed on used cars they traded in when buying new cars at PISC dealerships. PISC had promised to take care of those loans. Chrysler had objected to that practice but now says it will help pay off that debt.
The three dealerships - South Seas Jeep/Eagle Hyundai and Car World near Honolulu Airport, and Oahu Chrysler Jeep in Waipahu - remain closed. Almost all of their employees have either quit or been laid off and the new or used vehicles on the lots are now Chrysler's property.
According to the agreement detailed in the SEC filing, Alan Robin, PISC's president and chief executive, will have to pay Chrysler $325,000 to cover some of the debt that his company ran up. To pay Chrysler, Robin will have to sell his house, which he says is worth $950,000, the SEC filing says.
Robin today declined to comment on the SEC filing, citing confidentiality clauses. Chrysler officials were not immediately available for comment.
PISC employees will be paid 80 percent of the wages lost from Oct. 1 to Oct. 11, the filing said.
The dealerships were shut Oct. 11, after Chrysler Corp.'s western operations division stepped in and took control, saying it was entitled to do so under financial agreements with South Seas Motors Inc., the PISC unit that ran the dealerships.
Growing out of a local dealership incorporated in 1974, PISC sold stock that was listed on the Nasdaq stock exchange in 1987. It owned the Dollar Rent A Car franchise for Hawaii as well as several auto dealerships. It ran into financial trouble last year, however, and was unable to make loan payments to Chrysler.
Under pressure from Nasdaq, late last year PISC sold the Dollar franchise back to Dollar, itself part of Chrysler. That did not pull it out of the hole, however, and Nasdaq delisted the stock in December, leaving it to trade for pennies on the exchange's bulletin board system.
As of today, PISC stock was trading at 2 cents a share.