Investor sues A Japanese investor who evicted the chief executive of a high-tech firm from an estate in Aina Haina has sued to place the firm into bankruptcy liquidation.
for WorldPoint
liquidation
Hiroshi Teramachi is also
the former landlord of the
company's CEO, Massimo FuchsBy Tim Ruel
truel@starbulletin.comHiroshi Teramachi, along with his spouse and daughter, filed a petition in U.S. Bankruptcy Court on Friday to place WorldPoint Interactive Inc. into Chapter 7 bankruptcy. The Teramachis claim they are collectively owed about $4.9 million from convertible promissory notes that were used to invest in WorldPoint and have become due.
A bankruptcy judge must now decide whether to put WorldPoint into bankruptcy.
Five years ago, Teramachi was on much better terms with WorldPoint, and allowed its chief executive, Massimo Fuchs, to rent the Teramachis' beachfront Aina Haina estate for living quarters as well as a retreat for employees of WorldPoint, which translated Web sites into different languages for businesses.
Relations soured in 2000. Fuchs stopped paying rent and Teramachi sued to evict him. Fuchs countersued, seeking payment of his $20,000 security deposit as well as $100,000 in overpaid rent and improvements to the property.
Fuchs moved out of the home in August of last year and into a Harbor Court condominium downtown.
In November, state District Court awarded the $20,000 deposit to Fuchs, though the dispute is still pending in state Circuit Court. Fuchs said the bankruptcy petition makes no sense. "It's called revenge," Fuchs said. WorldPoint's assets are already spoken for, thanks to lawsuits pending against the company.
The state sued WorldPoint last year to foreclose on $800,000 outstanding from a business loan, and has been locked in a dispute with WorldPoint's law firm, Wagner Choi & Evers, over who gets first crack at WorldPoint's assets. The dispute became a matter for the courts when the auction company hired to sell WorldPoint's office equipment, Mark Glen Auctions, sued after equipment was removed from WorldPoint's offices shortly before the auction could take place. The auction itself turned up less than $100,000, money that has been placed into an escrow account.
In January, 1st Circuit Court ruled that Wagner Choi & Evers had a superior claim over the state. Around the same time, the law firm withdrew as counsel to WorldPoint, saying that WorldPoint no longer had the ability to pay its legal bills, which stood at $111,900 as of Feb. 28, court records show.
That means there is nothing left of WorldPoint for the Teramachis, as far as assets go, Fuchs said. Equipment from WorldPoint's former office in San Francisco has been taken over by the landlord of the building. Another office in Switzerland has been liquidated by the Swiss bankruptcy court to pay rent, Fuchs said.
"Even if the Teramachis have a claim, I don't see a purpose in the bankruptcy," Fuchs said.
The Teramachis want the bankruptcy court to appoint a trustee to oversee WorldPoint as soon as possible, in part to determine where all creditors stand, said the Teramachis' attorney, Robert K. Matsumoto, who filed the bankruptcy petition. It's not clear exactly what WorldPoint's assets are.
WorldPoint has a total of about $14 million in debt to its investors, many of whom used convertible notes, plus the state's claim of $800,000, Fuchs said. Shortly after the state sued, WorldPoint closed all of its offices worldwide, including its downtown Honolulu headquarters in the penthouse of 1132 Bishop St.
Since the state sued WorldPoint in June, it has recouped about a quarter of its claim.
The state loan, issued in 1995, was originally backed by mortgages on the Hawaii homes of several of WorldPoint's past and current employees and directors. The state has since reached settlements with several of the property owners, and has recovered about $200,000, according to records requested by the Star-Bulletin.
Once Fuchs is served with the bankruptcy petition, WorldPoint will have 20 days to respond.