Thursday, November 28, 2002

Malama spa
to reopen

Minnesota-based Aveda Corp.
will take ownership

By Erika Engle

Malama Salon & Spa may reopen at its Ala Moana Center and Manoa locations as early as Friday morning under the ownership and management of Minnesota-based Aveda Corp.

Malama filed for Chapter 11 bankruptcy in September, then shut down operations at the close of business Nov. 20 following a vote by the board of directors. At the time the board also planned to convert the bankruptcy filing to Chapter 7 liquidation but a new filing was not made with U.S. Bankruptcy Court.

Under a previous arrangement it appeared that only customers holding gift cards issued this month would be honored, but the Aveda said it intends to honor all outstanding gift cards.

"Aveda is 100 percent committed to taking on the ownership and management," said local spokes-woman Mona Wood.

All employees plan to return to work, she said, but founders Max and Mary Suiter will have no part in the operation once it reopens.

City Bank, one of Malama's largest creditors, was said to have reached an agreement with Aveda, paving the way for the salons to reopen.

"Since the matter is in litigation we are unable to comment at this point," Nestor Garcia, vice president for corporate communications, said on Tuesday.

Aveda is an internationally known maker of plant-based hair care, skin care, fragrance and cosmetics products as well as spa therapy treatments.

Malama lists debts of more than $5 million owed to some 240 creditors, with assets estimated at $2.5 million.

Its first store was opened in Manoa in 2002, followed quickly by the Ala Moana location. There were also plans for spas in Kailua and in the Halekulani hotel; construction was never completed and Malama's leases for the spaces were rejected by the bankruptcy court.

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