Creditors pursue builder
By Andrew Gomes
Advertiser Staff Writer
Creditors of Hawaiian Palisade Homes Inc., a Hawai'i-based builder of low-cost pre-manufactured houses, filed a petition this week to force the fledgling company to cease operations.
The Chapter 7 filing in U.S. Bankruptcy Court by three local building material supply and service firms claimed unpaid debts of about $300,000 against the publicly traded company, whose stock went into a free fall last month, dropping from about 60 cents a share to less than 1 cent.
Yesterday the shares, which trade over the counter, fell 0.2 cent to close at 0.7 cent.
Stuart Furman, Hawaiian Palisade's chief financial officer, yesterday said he was unaware of and surprised by the action of the creditors. The company is still operating, he added.
Hawaiian Palisade, with about 30 employees at its manufacturing plant in Kapolei, is a 2-year-old company that recently said it had dozens of signed contracts to build homes, primarily for developers of Hawaiian Home Lands property, and modular classrooms for the state.
The company said it has about $20 million worth of orders — but as of last month it had produced and installed only about 15 homes since beginning production late last year, according to Furman.
Hawaiian Palisade went public in March by merging with another publicly traded company. The company's stock reached a high of about $2.50 a share in April.
On April 30, the company announced it signed a letter of intent with Menehune Development Co. to build 30 homes at an average price of $56,600. Menehune plans to supply the homes as part of a state Department of Hawaiian Home Lands project.
On April 23, Hawaiian Palisade announced a similar deal to provide Menehune with 15 homes.
Hawaiian Palisade builds homes certified by the federal Department of Housing and Urban Development. The builder ran into trouble last year when it said a Mainland company hired to conduct HUD inspections failed to properly certify the homes.
The company also has previously said it expected to build hundreds of modular classrooms for the state for between $40,000 and $50,000 each.
Filing the bankruptcy petition were Pacific Building Material, with a claim of $110,531; Valve Service & Supply Inc., with a $102,452 claim; and Acoustical Material Services of Hawaii Inc., with a $67,760 claim.
