Bankrupt
POSTED: Sunday, May 31, 2009
It appears the Hawaii Superferry will not return to isle waters after all, since the company filed for Chapter 11 bankruptcy protection yesterday in Wilmington, Del.
CREDITORS
A partial list of Hawaii Superferry's creditors and their unsecured claims: » State of Hawaii: $731,080, minimum annual guarantees, liens and revocable permits.
» MTU: $544,653, engine maintenance and maintenance technician.
» Monarch Insurance Services Inc.: $202,000, workers' comp insurance.
» Sodexo Inc. and affiliates: $182,198, contract services/product costs for food, beverage and gift shop.
» Laird Christianson Advertising: $134,725, marketing/media services.
» Entrix Inc.: $126,002, consulting fees.
Source: U.S. Bankruptcy Court filing.
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In its petition, the company reported more than $100 million in assets and debts and said it would use the bankruptcy to close its business completely and liquidate the operation.
In a written statement, Hawaii Superferry officials said that with no ability to operate in Hawaii, the company has had no money to maintain the Alakai and a sister vessel, Huakai, which was scheduled to start sailing next year.
The company said efforts to charter the ships failed and the company couldn't come up with additional financing.
“;Accordingly, a filing of Chapter 11 was an unavoidable next step,”; the company statement said.
Michael Formby, director of harbors for the state Department of Transportation, said, “;Being informed (yesterday) that they did, in fact, file for bankruptcy is very disappointing.”;
Robert Harris, Hawaii chapter director of the Sierra Club, called the move unfortunate but avoidable.
“;If the company and state had followed the law in the beginning, this could have been avoided,”; Harris said. “;It's bad for businesses to cut corners and try to work the political process to get special favors.”;
The looming end of Hawaii Superferry brings closure to a saga that began in August 2007, when the Hawaii Supreme Court ruled—two days before the launch of the interisland service to Kauai and Maui—that an environmental review should have been completed before the state proceeded with $40 million in harbor improvements to accommodate the massive vessels.
The state maintained that the harbor improvements simply extended existing facilities—an action not requiring environmental review.
Court challenges and protesters in harbor waters off Kauai and Maui led the ferry to suspend operations, until the Legislature came back in special session in October 2007 to pass a law, known as Act 2, that allowed the $85 million, 349-foot twin-hulled catamaran Alakai to sail while an environmental impact statement was being prepared.
The ferry, capable of carrying as many as 866 people and 282 cars, sailed until this past March, when the Hawaii Supreme Court struck down Act 2 as unconstitutional because it benefited a specific company.
In addition to the court decision, Hawaii Superferry said its business was hurt by a decline in tourism, a 2008 increase in fuel prices and a interisland air fare price war.
Still at issue is whether the state or Superferry, will sue over the outcome of the service.
“;Nobody has had that discussion yet,”; Formby said. “;Up to this point, we've been trying to be as collaborative as we could be to encourage them to return and resume service.
“;We haven't actually sat down and had the tough discussion about legal liberties against one another.”;
Superferry officials in Hawaii did not return telephone messages yesterday seeking comment.
Bloomberg News Service contributed to this report.
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Source: Star-Bulletin archives and Hawaii Superferry
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