Liberty House to
close at Kihei

The troubled retailer
could not reach agreement
with the landlord

By Peter Wagner
Star-Bulletin

Liberty House plans to close its store at Azeka Place II in Kihei, Maui -- the company's 12th closure this year -- after attempts to negotiate lower lease rents fell through.

Some 27 employees will be affected by the July 24 closing. The company could not say how many of them will lose their jobs.

The 16,000-square-foot store was not among the 11 resort and specialty shops earlier targeted for closure under plans to cut costs. A total of 44 employees have been laid off in the store closures thus far, company officials say.

Liberty House filed for bankruptcy on March 19. The Chapter 11 bankruptcy -- the biggest in the state's history -- allows Liberty House to operate under protection from its creditors until a business reorganization plan is approved by the court.

U.S. Bankruptcy Court last week extended until Nov. 13 the period in which Liberty House has the exclusive right to devise a reorganization plan -- detailing plans to repay creditors and regain profitability.

The plan must include details of assets, liabilities and other financial information to allow creditors to vote on the plan before it is decided by the court.

Liberty House recently received a $50 million line of credit from a group of lenders headed by Bank of America -- its biggest creditor. Company officials say the financing will help restore relationships with vendors and clients.

A company spokesman said the Azeka Place II store, opened in May of 1992, performed poorly after Liberty House opened a department store at Kaahumanu Center in Lahaina in 1994.

The company decided to close the Azeka Place II store after requests to lower lease rents were turned away by the landlord, company officials say.