Wednesday, March 4, 1998

Judge denies
motion for Bishop
Estate sanctions

Judge Kevin Chang says delays in
handing over Bishop Estate documents
do not constitute acts
of bad faith

By Rick Daysog

While they may "appear suspicious and troubling," delays in handing over critical Bishop Estate documents to the state attorney general don't constitute acts of bad faith, according to Circuit Judge Kevin Chang.

Chang yesterday denied a motion by the attorney general's office to impose sanctions against the estate's board members.

It was the second recent setback for the state's probe into Bishop Estate: On Friday the Probate Court denied a request for a special administrator to oversee estate documents requested by the state.

In yesterday's motion the state had alleged that trustees withheld subpoenaed documents, including records showing that former state Sen. Milton Holt charged about $21,000 on estate Visa cards at local hostess bars, restaurants and Las Vegas casinos.

But Chang said the trustees made a reasonable effort to comply with the state's subpoenas. He said that some of state's arguments for sanctions were based on hearsay evidence and not sworn testimony.

"The court cannot say that the trustees acted in bad faith," Chang said.

William McCorriston, Bishop Estate's attorney, argued that the estate was not concealing records but was inundated by the sheer volume of information requested by the state.

McCorriston said that if the estate were to hand over all of the documents requested by the state, it would have to produce about 250,000 pages of records. Of the 80 subpoenas issued by the state, the estate didn't immediately respond to three, McCorriston said.

The trust has since delivered records requested under the three subpoenas but is appealing five separate subpoenas with the state Supreme Court.

Deputy Attorney General Dorothy Sellers said the estate demonstrated a lack of effort in responding to the state subpoenas.

She said the estate withheld sensitive documents, such as Holt's credit card information, and disclosed their existence only after the state received the records from a third party.

The estate turned over the Holt documents to the state only after Bank of Hawaii delivered the same records to the state under subpoena, Sellers added.

"It raises the greater question of ... what else is being withheld," Sellers said.

The state said the estate also held back other subpoenaed material: internal audit reports and a letter from an in-house attorney involved in the purchase of the so-called Van Dyke collection of Hawaiiana artifacts.

The Van Dyke letter -- which might indicate whether trustee Lokelani Lindsey breached her fiduciary duties by encouraging the estate to pay a higher price for the collection -- was obtained by the state after it subpoenaed Title Guaranty of Hawaii Inc.

Lindsey has denied the charge.

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