Japan creditThe Japan-based owner of nearly 3,000 acres of agricultural land near Dillingham Airfield on the North Shore is in court, again.
N. Shore landowner
for past loans
Mokuleia Land is alleged
to be $43.7 mil in debt
By Tim Ruel
A company set up by Japanese banks to collect on troubled loans is suing Mokuleia Land Co., one of northern Oahu's largest landowners, to collect more than $43.7 million in alleged debt. Cooperative Credit Purchasing Co. wants Mokuleia Land to repay loans it was given a decade ago by Japan-based Sanwa Bank Ltd.
Mokuleia Land is the business name of Tokyo-based Sankyo Tsusho Co., which owns 2,849 acres on the North Shore, a small office on Beretania Street, and a Diamond Head home. Sankyo Tsusho, which is seeking to dismiss the suit, is run by the family of Japanese resident Jun Gi Hong.
A hearing on the matter is scheduled for Monday before Circuit Judge Elizabeth E. Hifo.
Cooperative Credit, which filed the lawsuit on Sept. 1, wants a court-appointed sheriff to sell Sankyo Tsusho's Mokuleia property to help repay the loans, said Jeff Portnoy, attorney for the plaintiff.
Japan's Tokai Bank Ltd. filed a similar action against Sankyo in 1997, seeking a lien on its properties, and repayment on $21.8 million in loans. The action was later settled out of court, Portnoy said.
Paul Alston, attorney for Sankyo, has filed to dismiss the new claims, arguing that the case should be heard in Japan. Cooperative Credit has already sued Sankyo Tsusho in Japan to collect amounts allegedly owed to Sanwa, Alston said.
"It's two Japanese companies," he said. "Hawaii has nothing to do with this."
Alston also said both sides reached a settlement two years ago that released Sankyo from its debts.
According to the suit, Sanwa loaned about $22.7 million to Sankyo in 1987, the same year Sankyo bought its North Shore acreage for $15 million from Milwaukee-based Northwestern Mutual Life Insurance Co.
Sankyo had originally planned to rezone the agricultural land to build a golf course, resort and residential project, but ran into community opposition in 1993.
Sankyo also bought a Diamond Head residence for $6 million in 1990. The Noela Drive property is a home for the Hong family when they visit Hawaii, Alston said.
Sankyo defaulted on its loans in 1996, according to the suit. The lender, Sanwa, has since assigned the loan to the suit's plaintiff, Cooperative Credit.
"If we prevail, then the mortgages . . . that we allege have been improperly given would be voided," Portnoy said. The Mokuleia properties, now appraised at $10.22 million, could then be sold.
"If the allegations in the complaint are true, then Mokuleia Land Co. and Sankyo Tsusho Co. have serious financial problems and have a history of breaking their promises," said Kenneth Martyn, a lawyer and Mokuleia resident who has opposed resort development on the North Shore.
"This is a very different picture than they tried to present to the community when they were trying to get government approvals to develop the property outside of its current agricultural preservation zoning."