Beachfront properties
of bankrupt firm for sale

Met, a once-mighty mortgage
company, is auctioning off
some choice Oahu real estate

Financially troubled Metropolitan Mortgage & Securities is preparing to auction some prime Oahu property, which creditors hope will provide the company with cash to begin paying them back.

The beachfront parcels on the North Shore have already lured offers of more than $18 million.

The lots at Dillingham Ranch are among the most valuable properties Met has left, and money from their sale will be returned to the thousands of creditors in Spokane, Wash.-based Metropolitan's bankruptcy case.

Metropolitan CEO Maggie Lyons believes the company should clear at least $12 million on those sales, even after satisfying notes and other contingencies.

The company acquired the properties for about $17 million.

Mike Daily, partner with Mokuleia Preservation Partners LLC, which sold the land to Met in 2002, said the listing includes several beachfront parcels including the 32-acre Lapaku Pasture, the 17-acre Mokuleia polo grounds and three preservation-zoned properties.

The Lapaku Pasture recently was subdivided into four 8-acre estate tracts, Daily said.

The historic Dillingham Ranch plantation estate, which is across Farrington Highway from the oceanfront properties, is not part of the deal.

The 2,600-acre ranch is owned by Western United Life Assurance, an affiliate of Met that was placed in receivership last year by Washington state regulators to protect insurance policyholders from Met's financial woes.

Metropolitan had been investing in Hawaii since the 1960s, when founder C. Paul Sandifur Sr. became intrigued by the idea of buying beachfront property for development.

Met Mortgage, once a $2.7 billion financial conglomerate, filed for Chapter 11 bankruptcy protection in February 2004. The company and its affiliates owe an estimated $583 million, mostly to 16,000 small investors in the Pacific Northwest who bought notes and preferred stock.

The companies are the subject of numerous ongoing investigations by state and federal regulators, including the Securities and Exchange Commission.