By Andrew Gomes
Advertiser Staff Writer
Local developer Peter Savio, who filed for personal bankruptcy protection Friday, said yesterday that he did so to block a "rogue lender" from evicting his profitable company from its University Avenue offices.
Savio said the difficulty stems from a separate Chapter 11 reorganization filing by Savio Development Co. a year ago, listing $50.5 million in debts and $45.8 million in assets. Savio said he had been working with creditors, mainly banks, to work out those debts under a reorganization plan he expected to complete in the next couple of months.
|Peter Savio filed for personal bankruptcy protection after lender Central Pacific Bank moved to foreclose on his offices at University Plaza.
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To one creditor, Central Pacific Bank, Savio said, he pledged seven units at University Plaza, which he owned personally and leased to another company of his, Savio Realty Ltd. Better Homes & Gardens.
Central Pacific sued to foreclose on the offices, and on Jan. 26 notified Savio Realty it had five days to move, according to Savio.
"Basically there was no need for personal bankruptcy other than Central Pacific Bank gave me five days to move," Savio said. "Thats completely unreasonable. I cant even get my telephone changed in five days. The only way to stop them was to file personally."
A bank spokeswoman said its policy is to not discuss issues between the lender and debtors.
Savio said he plans to move into three other units in the building.
By filing personal bankruptcy, the foreclosure suit is stayed, according to Foreclosure Commissioner Randall Yee.
In his personal filing, Savio listed debts of $45 million. Among the largest creditors are Beal Bank of Dallas, owed $20 million; First Hawaiian Bank, owed $7.5 million; Kamehameha Investment Corp., owed $6 million; and City Bank, owed $4.5 million.
Central Pacific is listed as the fifth-largest of 50 to 100 creditors, with a $1.6 million claim, although Savio said the bank is owed about $4.5 million through various Savio Development debts and personal guarantees.
Savio said he pledged $3.5 million in assets (the University Plaza units) toward the $4.5 million debt. According to the foreclosure filing, about $1.1 million was due and unpaid as of last March, two months after Savio Development filed for Chapter 11.
Savio Development, which has converted about 3,500 leasehold apartment rental units to fee-simple ownership and sold them at below-market prices to individual owners, got caught when buyers who borrowed from the company could not pay.
But business has begun to rebound with the improving economy, Savio said. "I intend to do a lot of developments in the next six or seven months," he said. "Im coming back. I got a lot of things falling into place."
Savio is about to close on his purchase of the Diamond Head Beach Hotel, where he plans to resell units individually. He is among several entities trying to buy 17,780 acres of Amfac/JMB Hawaii land on Kauai, where he said he would like to develop an agricultural subdivision. He said he also is interested in buying three or four apartment buildings for condo conversions.
If all goes well, Savio said, he expects to use proceeds to pay off remaining debts within a year, including Central Pacifics.
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