Amfac plan gives creditors stake
By Andrew Gomes
Advertiser Staff Writer
Creditors of Amfac Hawaii LLC would be granted an ownership stake in the company under a reorganization plan proposed by the Chicago-based company, which filed for Chapter 11 bankruptcy protection last week.
About 30 Hawai'i companies owed money would have their claims converted to equity, but the biggest owner of Amfac Hawaii would remain its parent, Northbrook Corp., a one-time owner of the former Liberty House kama'aina department store chain.
Another 15,000 or so investors who bought Amfac Hawaii certificates of land appreciation notes, or COLAs, also would become stakeholders in the reorganized company, the descendant of what was once Hawai'i's biggest business.
The reorganization plan has not yet been filed and would be subject to approval by a bankruptcy judge, but it has been agreed to in principal by Northbrook and an Ohio trust company representing COLA holders, according to a filing with an Illinois bankruptcy court.
Northbrook and Bank One Trust Co. N.A. have $327 million in claims against Amfac Hawaii, compared with about $800,000 by other creditors.
Northbrook's $187 million claim is secured, meaning it has priority to be repaid ahead of other claims.
But Amfac Hawaii assets would not cover even half of Northbrook's claim, the filing said.
The plan is expected to be filed soon.
Details were not available, but Amfac Hawaii spokesman Jim Boersema said even the smallest creditors would receive equity in the reorganized company.
The largest local creditors are Goodfellow Bros., owed $137,324; Brewer Environmental Service/Brewer Environmental Industries, owed $85,054; Fong Construction Co., owed $67,547; and Kaanapali Operations Association, owed $60,000. The smallest Hawai'i creditor is Kauai Automated Fuels Network, owed $850.
In another matter, a judge authorized Amfac Hawaii to pay $225,000 for employee compensation outstanding as of the bankruptcy filing, and $350,000 to cover vacation benefits for 71 workers.
Amfac Hawaii and eight subsidiaries that also filed for bankruptcy are continuing operations, which include a Ka'anapali master plan and strategic land sales.
Amfac Hawaii companies that own the Waikele Golf Course on O'ahu and the two Royal Ka'anapali Golf Courses on Maui are not part of the bankruptcy.
Gary Nickele, who was with Northbrook since 1998 and took over as Amfac Hawaii president last year, has said he expects the company to emerge from bankruptcy protection within several months.
Most of the company's financial difficulties resulted from agricultural operations that lost about $120 million since 1989, according to Nickele.
From 1998 through September, the company lost $145 million.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
