A state judge will appoint a master to investigate the finances of a local cemetery operator that has been sued by the state for allegedly failing to account for $20 million in customers' prepaid funeral services.
The Attorney General's Office and lawyers for RightStar Hawaii Management Inc. have each submitted the names of two candidates to Circuit Judge Sabrina McKenna, who is expected to select a master from the list shortly.
RightStar, whose trustees include former Gov. John Waihee, operates several local cemeteries, including Maui Memorial and Valley of the Temples in Kaneohe.
In its lawsuit, the state alleged that RightStar improperly withdrew $20 million from its trust accounts in 2002. The money was for customers who had purchased pre-paid funeral plans.
RightStar currently has about $38 million in its trust accounts.
The Attorney General's Office and RightStar said the master will conduct a detailed study of all the deposits and withdrawals into RightStar's trusts between 2002 and 2003.
The master also will prepare audited financial statements for the trusts.
The appointment of a court-appointed master comes as a state judge in a separate foreclosure actions has appointed a receiver, Guido Giacometti, to run the cemeteries' daily operations.
In that lawsuit, Nevada lender Vestin Mortgage Inc. alleged that RightStar defaulted on a $34 million loan.