Friday, May 21, 1999

Hamakua Sugar
liquidation near
an end

A hearing is scheduled to
increase payments to some creditors
and to dismiss the case

By Peter Wagner


The last note of a lingering refrain could fade forever next week when the liquidation of Hamakua Sugar Co. comes before a bankruptcy judge for perhaps the last time.

A final hearing is scheduled for Thursday before U.S. Bankruptcy Judge Lloyd King, who could close the six-year-old case along with a chapter in Hawaii's history.

"It was the end of the plantation way of life on the Big Island," said attorney Chuck Choi, representing the court-appointed bankruptcy trustee.

Judge King is to hear the trustee's request to increase payments to some creditors and to dismiss the case.

Under the motion, filed by trustee John Goss, "post-petition" creditors would get about 59 cents on the dollar for claims against the company, a 7-cent increase. The approximately 730 post-petition creditors are mostly field workers who stayed on for a final harvest at Hamakua after the company filed for Chapter 11 bankruptcy in August 1992.

About 500 "pre-petition" creditors, those owed money before the company declared bankruptcy, are to get about 3.5 cents on the dollar, according to Choi.

Under federal bankruptcy guidelines, post-petition creditors are paid first, usually in full, before pre-petition creditors are considered.

Hamakua Sugar, which began operating in 1877, shut down in 1993 a year after filing for Chapter 11 bankruptcy. Assets were shown at about $128 million and debts at $132 million. Efforts to reorganize the company were abandoned six months later and liquidation of land and other property began. About 30,500 acres of the plantation was bought by Bishop Estate for $21 million in 1994.

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