The company reported debts equaling $863 million and assets totaling to $530 million.
Tom Jones, general manager of Kyotaru Hawaii Corp., said the bankruptcy reorganization filing in Japan is unlikely to have any impact on the Hawaii operations in the near future.
"Our restaurants have been doing quite well lately," he said.
Kyotaru was already an investor in Hawaii properties when it bought the Columbia Inn in 1986 from the Kaneshiro family, which founded the business in 1941.
The Hawaii operations now include the Columbia Inn at 645 Kapiolani and its 21,000 square feet of fee simple land, another Columbia Inn in Kaimuki, the Kyotaru Restaurant in Waimalu, and a smaller Kyotaru and an ice cream shop in Waikiki.
It also has two sushi carry-out shops in downtown Honolulu.
The Japanese parent said its problems were due to the burst of the bubble in Japan's economy in the early 1990s and expanding too fast in the United States.
Bloomberg News reported that like many troubled companies in Japan, Kyotaru has been carried for years by its banks.
The banks extended new loans that the company used to try to keep up with payments on its old debts, but the debts finally grew so large that the banks refused to grant Kyotaru new loans.
Kyotaru, one of the 20 largest restaurant chains in Japan with 761 take-out sushi shops that generate sales equal to $478 million, decided to seek bankruptcy protection after officers realized it could not meet debt payments this month.
Kyotaru said it will continue to operate its sushi stands and restaurants while it negotiates a restructuring plan with creditors. Company President Akira Katayama blamed Kyotaru's problems on efforts to expand abroad rapidly and losses from real estate and stock purchases in the late 1980s.
"Sales and profits from our food business have been OK, but the debts accrued during the bubble years have triggered the failure of the company," he said.
The company attempted to expand its restaurant business into the United States, especially Oregon and Hawaii. As part of that effort, the parent company lent more than 30 billion yen to six U.S. subsidiaries that it doesn't expect to get back.
In Honolulu, Jones said Kyotaru last year, sold one of its big U.S. operations last year, Restaurant Associates, which it bought in 1990 for $240 million.
It still has a chain of 60 U.S. restaurants, mostly in the West, and a food processing plant in Oregon, which exports imitation crab sticks to Japan, Jones said.