A company led by former Hawaii automobile dealer Jim Slemons has filed for Chapter 11 bankruptcy protection over lease payments in arrears and impending displacement by the rail transit line.

Jim Slemons Hawaii Inc. lists assets of $600,000 and liabilities of $225,000 in disputed back rent as well as nearly $4,100 in insurance costs for a lease on three acres at 98-085 Kamehameha Highway.

One building houses a “;car stereo place, Lava Motors, which is the used-car operation ... it's like a strip mall”; with mom-and-pop businesses, said Slemons' attorney, Anthony Locricchio. Slemons also subleases half the property to Tony Hawaii Automotive Group Ltd. and once had his own dealership on the site.

“;He's got a lease for nine more years and he built the building on that property ... and that building would be taken down to make way for rail transit ... so he was forced into bankruptcy,”; Locricchio said.

Before exiting the car business in 1996, Slemons once suspended a DeLorean above his dealership from a crane as a publicity stunt. Now, the liability and the prospect of losing income-generating property is hanging over his business.

Slemons' plan is to petition “;the city to expedite his condemnation review ... to have the city give him his condemnation money and then he can take care of past rents,”; Locricchio said.

But city spokesman Bill Brennan said condemnation is a last resort.

The city will first attempt to negotiate with landowners for purchases of affected real estate, but that cannot begin until the final environmental impact statement is published and the city receives a decision of record from the Federal Transportation Administration.

The FTA will have final say over landowners' and tenants' acquisition awards and relocation assistance.

As large a project as rail transit is, “;we just need slivers of property”; for the most part, Brennan said. “;There's like, next to no complete acquisitions of property. We're trying to build it along city rights-of-way so we can avoid”; large displacements.

Slemons leases the land from Continental Investment Co., led by Ronald Fujikawa. The back rent “;started to build after May of this year,”; Fujikawa said.

A rectangular portion of the land fronting Kamehameha Highway is the rail-affected part and is much less than an acre, Fujikawa said. Continental does not plan to seek an expedited negotiation with the city, but the bankruptcy “;shuts off all of our cash flow.”;

“;Fortunately we have some funds that will help Continental through this period of the filing of this bankruptcy and we'll see where it goes,”; he said.

The three-acre parcel is the only property Continental Investment owns. But its affiliate, Associated Steel Workers Ltd., of which Fujikawa is also president, owns a site in Campbell Industrial Park. Associated Steel is a subcontractor that anticipates quite a bit of rail-related work after the bids go out to general contractors at the end of the month.