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The Honolulu Advertiser
Posted on: Thursday, August 22, 2002

Waimea park dispute ends

By Andrew Gomes
Advertiser Staff Writer

The New York owner of Waimea Valley Adventure Park and Sea Life Park has reached a settlement with Bank of Hawai'i over a loan dispute in a major step toward completing the city's purchase of the Waimea property and resolving the park owner's bankruptcy.

Attractions Hawai'i, headed by New York investor Christian Wolffer, has been embroiled in a dispute with the bank over a loan and filed for Chapter 11 bankruptcy protection last year in New York to block the bank from selling the Waimea attraction at a foreclosure auction.

The city took possession of the Waimea property through condemnation in February, and deposited $5.1 million with a Hawai'i court pending completion of the forced sale.

Attractions Hawai'i recently requested that $5 million be released to pay down nearly $20 million in priority bankruptcy claims, including a $3.8 million settlement reached earlier this month between the company and Bank of Hawaii, according to an Attractions Hawai'i motion signed by New York attorneys representing the company and the bank.

The bank had claimed that Attractions Hawai'i owed it $4.3 million for remaining mortgages on the two O'ahu attractions Wolffer bought in 1996. Wolffer argued that the balance due was $498,000 based on a different interpretation of the purchase agreement.

Under terms of the settlement confirmed yesterday by bank spokesman Stafford Kiguchi, Bank of Hawaii will receive $3.8 million to resolve the dispute, and the payment, if released by the Hawai'i court, would reduce the bank's overall $7.4 million claim against Attractions Hawai'i in the bankruptcy case.

Another creditor, Azure Enterprises Ltd., which has a $9.2 million claim related to loans made to Attractions Hawai'i, would be paid $900,000 from the Waimea sale money, according to the agreement.

The remaining $300,000 would be placed in the trust of the bankruptcy court. Another priority creditor, Volume Services Inc., which has a $3.2 million third-priority claim, would not receive anything from the distribution.

All terms were agreed to by Bank of Hawaii, Azure and the committee of unsecured creditors, the motion stated..

A Sept. 5 hearing has been scheduled to hear the motion to approve the settlement and the disbursement of sale proceeds if released, according to a filing last week with the bankruptcy court.

If approved, the payment would leave Attractions Hawai'i with about $15 million in priority creditor claims plus other unsecured claims, and assets of $300,000 and Sea Life Park, which the company has said it does not intend to sell.

Wolffer and attorneys for Attractions Hawai'i could not be reached for comment yesterday.

The company has not yet filed a plan of reorganization, but has been ordered by the court to do so by Sept. 16.