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Citibank poised to
assume control of
Executive Centre
Sukamto Sia's former holding
By Peter Wagner
would help reduce his
debt by $500,000
Star-BulletinA sleek downtown high-rise once owned by international investor Sukamto Sia would change hands, yielding about $500,000 to his bankruptcy estate, under a plan to be considered in U.S. Bankruptcy Court next week.
It won't put much of a dent in Sia's $296.4 million debt, but the deal offers the largest payout to date in a difficult effort to find the high-spending businessman's unencumbered assets around the world.
The plan would transfer ownership of the heavily mortgaged Executive Centre on Bishop Street to prime lender Citibank N.A., holding $56.6 million in loans against the 41-story tower.
The property in February was valued at $39.5 million, according to court documents.
If approved, the plan would avoid a pending foreclosure suit filed against the property by Citibank a month after Sia went into bankruptcy in November 1998.
"It isn't much," said Guido Giacometti, trustee in Sia's ongoing Chapter 7 bankruptcy. "Everybody's taking a haircut."
None more so than Citibank, which agreed to reduce outstanding debt from $56.6 million to $39 million, a $17.6 million loss if the plan is approved.
"Life is not always fair," said Citibank attorney Tom Roesser.
The new owners would look to sell individual units in the building but would honor all leases, Roesser said.
"Our fondest desire is that people will not notice any difference in the day-to-day operations of the project," he said.
The $500,000 to be paid into the bankruptcy estate would come from Executive Centre's cash reserves in settlement of a dispute over a $3 million secondary mortgage.
The mortgage, transferred by Sia to a British Virgin Islands corporation called A-B-C Pacific Ltd. shortly before his 1998 bankruptcy, had been sought as part of the estate by the bankruptcy trustee.
Executive Centre, formerly owned by MKS Executive Partners, a Sia holding, is one of Sia's two major holdings in Hawaii. The high-rise houses a 120-room Aston hotel, several retail outlets including Long's Drugs and Ross Dress For Less, and 379 residential units.
The other key property is Sia's 74 percent stake in the Bank of Honolulu, 307,964 shares now held and being marketed by Giacometti.
The trustee is preparing a report to the court on collections by the estate.
Those efforts, which include reclaiming international properties, have so far yielded modest results.
The auction last year of Sia's wine collection, several cars and personal effects raised about $250,000. More recent efforts have yielded some foreign bank proceeds.
Sia filed for bankruptcy protection from his creditors in November 1998, claiming $9.3 million in assets and more than $296 million in debts. His bankruptcy came weeks after his arrest in Las Vegas for allegedly writing $13.5 million worth of bad checks to pay gambling debts.
Formerly known as Sukarman Sukamto, Sia was a high-profile investor in Hawaii during its "bubble" economy of the 1980s. Besides buying Executive Centre and numerous residential properties, Sia acquired and later sold to the state the site that now houses the Hawaii Convention Center.
Sia initially filed for protection under Chapter 11 reorganization bankruptcy but later converted the case to a Chapter 7 liquidation.
Giacometti in December filed a separate Chapter 11 bankruptcy for MKS Executive Partners, a Sia holding and former owner of the Executive Centre property.
The bankruptcy reorganization plan would transfer the property to a limited partnership controled by a Citibank affiliate.
The affiliate would hold an 80 percent interest in the property, with 10 percent retained by MKS affiliate SHC Realty Inc.
SHC-Realty & Management is general partner in a limited partnership owned by Sukamto Holding Corp. The holding company was owned by Sia until his bankruptcy, when ownership passed to the court-controlled estate.
Remaining interest in the property would be divided among unsecured creditors and A-B-C Pacific.
