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Hawaii developer
Savio files for
Chapter 11

He says an eviction notice
from Central Pacific Bank to
move out of his Realty office
prompted the action

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By Tim Ruel
Star-Bulletin

Developer Peter Savio says he blames Central Pacific Bank for causing him to file personal bankruptcy by demanding that Savio Realty Ltd. move out of its Moilili offices by this Friday.

"I'm absolutely shocked that a local lender would act this way," said Savio, who filed Chapter 11 reorganization bankruptcy on Friday afternoon.

The petition lists 20 unsecured creditors with total claims of $45.6 million, mainly comprising personal guarantees of loans borrowed by Savio Development Co., which also filed Chapter 11 last year. Personal debts were a small factor in the latest petition, which was filed jointly by Savio and spouse Phyllis Savio.

Central Pacific Bank, Hawaii's fourth largest bank, is one of Savio's smaller creditors in the personal bankruptcy, with $1.6 million owed. The largest creditor is Dallas-based Beal Bank, which is owed $20 million linked to Savio's Queen Emma Gardens project on Nuuanu Avenue.

Savio said today most of the creditors were close to being paid off and that Savio Development could have emerged from bankruptcy within a month.

Late last week, Central Pacific Bank gave him final notice to move Savio Realty out of its offices in University Plaza out in five days. The bank previously acquired the offices in a loan workout for Savio Development.

Savio said today it was impossible to move out in five working days. "We've got a thousand rental accounts. We've got 20 to 30 agents. . . . It's not a small company."

"My only way to stop them was to file," Savio said. On the same day he got the notice, Savio said he hurriedly filed the petition. Chapter 11 bankruptcy allows him to form a plan to repay his creditors, stalling any actions to foreclose on properties.

Central Pacific Bank declined comment today, citing its practice of keeping client issues confidential.

Savio said he is taking a few weeks to move into a smaller group of offices in the University Avenue building. He said he is not cutting any staff and noted that Savio Realty showed a profit last year and is looking to generate even more income this year.

In 10 days, Savio said he will be completing his announced purchase of the Diamond Head Beach Hotel in Waikiki for just under the asking price of $5.5 million.

Savio is also said he is proceeding with his bid to buy 17,780 acres of former sugar land from Kauai landowner Amfac/JMB Hawaii LLC. Amfac listed the acreage for $26 million in September and announced plans to close two sugar mills and lay off 400 employees. Savio said he has three letters of interest from lenders who want to participate in a deal for the property. They are aware of Friday's bankruptcy filing, he said.

Savio is known for having converted several thousand leasehold apartments to fee-simple condominiums since 1981, many in connection with Kamehameha Schools.