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The Honolulu Advertiser

Posted on: Wednesday, October 3, 2001

Bankruptcy assets assigned

Advertiser Staff and News Services

A judge has authorized the largest creditor in the MidPac Lumber Co. Ltd. bankruptcy case to apply $1.1 million in liquidated assets toward its claim, effectively leaving little to nothing for other creditors.

The money had been raised by former MidPac lender CIT Group/Business Credit Inc., which generated $717,000 from an auction of MidPac inventory, $319,000 in accounts receivable collections and interest.

Use of the money had been restricted since Jan. 18, 2000, when MidPac's involuntary Chapter 7 petition was filed, one day before the previously scheduled auction by CIT.

Yesterday Bankruptcy Judge Lloyd King issued an order allowing CIT to apply the money to its $2.5 million claim.

MidPac had known assets of $1.1 million, nearly all of it in the CIT account. A MidPac trustee has another $26,000 in recovered assets. CIT is left with a secured claim of $1.4 million. More than 80 other creditors have claims totaling roughly $6 million.

Yet MidPac Trustee Mark Yee said the case is not over. He said yesterday that he is looking at possibly suing CIT to recover asset proceeds.