Tuesday, January 5, 1999

Citibank seeks
receiver for
Oahu hotel

By Peter Wagner


Citibank, N.A. of Hong Kong has asked a state court to appoint a receiver to take control of revenues generated by the Executive Centre Hotel downtown.

The action, filed yesterday in Circuit Court, follows two foreclosure lawsuits against the 41-story hotel filed in December for overdue loan payments totaling $1.5 million.

The hotel is owned by MKS Executive Partners and SHW-Realty, holdings of Indonesian businessman Sukamto Sia. Sia, formerly Sukarman Sukamto, recently filed for bankruptcy in Honolulu.

Attorney Tom Roesser, representing Citibank, said his client wants a better accounting of revenues received by the hotel. The motion is to be heard Jan. 21 by Judge Kevin S.C. Chang.

Meanwhile, owners of the hotel today called foreclosure action premature in the face of new developments, including the signing of Ross Stores as a major tenant on the building's ground floor.

"Ross Stores and its proven success will add a new critical mass, visibility and utilization to the project," said Arick Yanagihara, executive vice president of MKS Executive Partners and SHW-Realty, majority owners of the building.

Yanagihara noted that Aston Hotels & Resorts, which has a management contract with the hotel, is working to make the hotel more viable as downtown's only hotel.

And he said the owners have paid down some its debt to $51 million from $80 million.

Roesser said that while the new tenant and other developments are positive, they aren't likely to result in loan payments any time soon. "It would only be premature if they were not in default," he said.

Yanagihara said the partnership is trying to work out an agreement with the bank to avoid foreclosure. He blamed Hawaii's weak economy for financial problems causing the hotel to default on monthly loan payments.

The hotel owners borrowed a total of about $80 million from Citibank in separate loans in the past 10 years. According to Roesser, payments on the loans stopped in September.

Sia, arrested in Las Vegas in October for bouncing $8 million in checks at the Rio and Caesars Palace, filed for Chapter 11 bankruptcy protection on Nov. 6.

Sia lists more than $296 million in debts, mostly to Asian banks and gambling casinos around the world, and about $9 million in assets.

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