Turtle Bay Resort in foreclosure
The controversial North Shore resort owes more than $283 million
The owner of the controversial Turtle Bay Resort on Oahu's North Shore said it plans business as usual despite being slapped with a $283 million foreclosure lawsuit by its international lender.
Kuilima Resort Co., the local entity that has owned the 880-acre resort since 1988, said it will try to "work out an amicable agreement" with Credit Suisse, which filed the suit in 1st Circuit Court on Thursday.
"It shouldn't impact the day-to-day operations of the Turtle Bay Resort," said Nicola Jones, Kuilima's chief executive officer. She said Kuilima doesn't plan to file for bankruptcy protection.
Nathan Hokama, Kuilima spokesman, said he didn't know how long it would take to resolve the lawsuit.
The suit is another financial blow to the troubled resort, which has failed to secure a buyer or partner over the past year to develop up to five hotels in one of Oahu's last remaining rural areas.
The suit seeks to foreclose upon the resort, which includes a 401-room hotel, 42 beach cottages, two championship 18-hole golf courses and entitlements for the development and sale of about 3,500 planned hotel and condominium units.
The lender also is asking the court to appoint a receiver to take control of the property, the suit said.
The suit claims that Kuilima failed to pay the principal amount of $687,500 on June 29 and later defaulted on an "amendment fee" of $1 million on July 30.
"As a result of each of these defaults, all unpaid principal and accrued interest on the loan were declared immediately due and payable on Aug. 31," the documents said.
Kuilima borrowed $275 million from Credit Suisse in September 2005. As of Nov. 30, Kuilima owed a principal amount of more than $270 million, $10.4 million in interest and amendment fees of $2.3 million, according to the lawsuit.
Representatives of Los Angeles-based Oaktree Capital Management LP, which owns Kuilima, didn't return a call for comment.
Local attorneys Kyle Sakumoto and Denis Lee, who filed the lawsuit on behalf of Credit Suisse, also didn't return the Star-Bulletin's calls. A representative of Credit Suisse couldn't be reached for comment.
The resort, which early last year revived 20-year-old plans for a massive development, has been caught up in labor disputes and controversy over ancient Hawaiian burials. Opponents of the proposed expansion also are concerned about potential traffic congestion and maintaining the area's rural character. However, supporters believe expansion would bring needed jobs to the area.
Eastdil Secured LLC has been quietly marketing the property, so far with no luck in securing a potential buyer since Starwood Hotels & Resorts earlier this year decided against bidding.