Tour firm switches The bankruptcy case of defunct tour firm Trans Hawaiian Services Inc. has been converted to liquidation in a growing probe of the firm's takeover by local competitor Roberts Hawaii Tours Inc.
to liquidation
Trans Hawaiian changes
bankruptcy to Chapter 7By Tim Ruel
truel@starbulletin.comTrans Hawaiian and its related companies filed for Chapter 11 reorganization in July, claiming more than $7 million in debts and assets of $1.1 million. The case was converted to Chapter 7 liquidation last week, bankruptcy documents show. Attorney Mary Lou Woo has been appointed as an interim trustee to collect all of the firm's financial records and property. A meeting of creditors has been scheduled for next week.
The U.S. Trustee's Office had sought to convert the case to liquidation because Trans Hawaiian no longer operates as a business and Roberts had taken charge of all of its financial records. The Trustee's Office is the arm of the Justice Department that oversees federal bankruptcy cases.
Trans Hawaiian's stock was sold in December to a company controlled by the sons of Robert Iwamoto Jr., owner of Roberts Hawaii, documents show. In return, the seller Raymond Miyashiro received an exemption for about $8 million in personal guarantees. In February, another corporation controlled by the Iwamoto family took over the entire Trans Hawaiian business.
"There are substantial questions over the nature of the transactions and the payments made by the debtors to Roberts Hawaii," the U.S. Trustee's Office said in an August statement to the bankruptcy court. "It is not appropriate that Roberts Hawaii have sole control over the debtor's financial information."
A permanent outside trustee is expected to be appointed to the case by the bankruptcy court.
The takeover of Trans Hawaiian has also been under investigation since June by the state Public Utilities Commission, which regulates the tour transport industry. The commission had been seeking an application for the transfer of Trans Hawaiian's ownership, but Trans Hawaiian told the commission it couldn't afford to complete the application process.
The commission is keeping close track of the bankruptcy proceedings, in part because its approval would be needed if the bankruptcy court seeks to sell tour licenses still held in Trans Hawaiian's name, said commission attorney Kevin Katsura.
Trans Hawaiian, founded in 1987 as an affiliate of Miyashiro's travel agency Regal Travel Inc., was previously one of the state's larger tour firms. Trans Hawaiian's major creditors include Aloha Airlines, owed more than $2 million, and the state Department of Transportation, owed $180,000.
