3 Unity House
properties to be sold

A federal judge will allow Unity House's court-appointed receiver to sell the historic Marks Estate in Nuuanu to cover the labor organization's expenses.

U.S. District Judge David Ezra yesterday approved a request by the receiver, Anthony Pounders, to list the 4.8-acre Marks Estate, a Waikiki condo and an Ewa Beach home.

Brook Hart, Pounders' attorney, said in court papers that the properties are not generating any rental income and will be sold to "prevent waste and help support day-to-day Unity House activities."

The planned sale comes after Senior U.S. District Judge Sam King in December placed Unity House under receivership and removed Unity House President Tony Rutledge and his son Aaron Rutledge from the nonprofit labor organization.

Federal prosecutors alleged the Rutledges operated Unity House for their personal benefit and squandered millions of dollars. Prosecutors also charged that the elder Rutledge attempted to divert Unity House's assets into overseas accounts to evade a criminal investigation.

Hart said the receiver is appraising the value of the Marks Estate, which will require "tens of thousands of dollars' worth of repairs."

Unity House paid $2.5 million for the Marks Estate in 2003, but the property -- which includes a 10,000-square-foot, two-story mansion -- likely will sell for much more than that in today's booming real estate market.

The estate was built in 1929 for Clarence H. Cooker, who bequeathed it to the Academy of Arts. The academy later sold it to Elizabeth Marks, wife of political big wheel A. Lester Marks. The territorial government bought much of the estate, including the buildings, in 1956 to complete the Pali Highway.

Hart said the Waikiki apartment, a fourth-floor unit at the Ilikai, was purchased by Unity House for $325,000 in 1997 and was used rent-free by Unity House insiders. He said that at one time Tony Rutledge stayed at the condo while his Kailua home was being renovated.

The Ewa Beach home, at 91-1754 Punako St., was occupied rent-free by Unity House employees who have been removed, according to Hart. Unity House's Lokahi Greens in Ewa Inc. subsidiary purchased the property for $153,540 in 2000.

Since taking over Unity House's operations, Pounders said he has cut the organization's monthly payroll to about $43,000 from $88,000 and has reduced monthly consulting fees by $13,500. Pounders previously criticized the Rutledges for paying more than $26,000 in monthly salaries and consulting fees to relatives and friends.

Pounders also sold the NCR Building on Kapiolani Boulevard in January to a group headed by U.S. Pacific Construction Inc. for $6 million, or about $1 million more than what Unity House paid for the building in 1998.

In a related matter, Ezra pushed back the Rutledges' May 10 trial date to Oct. 4 and unsealed some of the records relating to the Jones Day law firm's representation of Tony Rutledge.

Prosecutors previously called for the disqualification of the mainland law firm due to an alleged conflict of interest, whose details were sealed from the public.

Jeffrey Rawitz, Rutledge's lawyer and an attorney with Jones Day, argued that the records should remain sealed because they are protected by attorney-client privilege. Ezra denied what he said was a "blanket objection" and gave the Jones Day firm a week to provide a list of documents it believes are privileged.

"It's always been my view that our courts are matters of public record," Ezra said.