Horita apartment
company declares
bankruptcy

Star-Bulletin staff

Royal Kunia Apartments Inc. has declared bankruptcy to reorganize and stave off an expected foreclosure, a company spokesman said.

The company, headed by developer Herbert Horita, listed assets of $31.5 million and liabilities of $67.9 million in yesterday's Chapter 11 filing.

"We're confident that in the next several months, Royal Kunia Apartments will be able to offer the banks a new financing package that will resolve this matter to everyone's satisfaction," said Jim Boersema, spokesman for Horita Development, Royal Kunia's parent company.

Royal Kunia, the Horita subsidiary, owns about 400 affordable rental apartments in the Royal Kunia development near Village Park. "The apartments are 99 percent occupied," Boersema said. A loan and credit line has been financing the operation for some time, he added.

"Royal Kunia Apartments has never been late on their payments," Boersema said.

But changes recently took place with banks in Japan that are involved, he said. "The terms of the credit line have changed, and as a result the banks were going to foreclose in the very near future."

Royal Kunia Apartments declared Chapter 11 bankruptcy to forestall the foreclosure, Boersema said.

Creditors listed with the filing include Bank of Hawaii, Bank of New York and Bank of Tokyo-Mitsubishi Ltd.