Golf course sale examined
By Andrew Gomes
Advertiser Staff Writer
A little more than a year after buying Kiahuna Golf Club on Kaua'i, local developer Bert A. Kobayashi has sold the Po'ipu course to a handful of area residents for $1.7 million more than what he paid.
Nine investors with homes on the golf course paid $4.5 million for the 18-hole course, which Kobayashi companies acquired in January 2002 for $2.8 million from a Japanese firm on the brink of bankruptcy.
The new owners, who include Tom Batey, a one-time administrative assistant to former Kaua'i Mayor JoAnn Yukimura, said they plan to restore the course to its "pristine" pre-Hurricane 'Iniki condition of more than a decade ago.
But while good for golfers and area property owners, the transaction raises further questions about Kobayashi's acquisition, which is being investigated by a court-appointed bankruptcy trustee in Japan representing the estate of previous course seller Sports Shinko (Kaua'i) Co. Ltd.
Kobayashi's Kiahuna purchase was one of three golf courses and two hotels Kobayashi companies bought from affiliates of Osaka-based Sports Shinko Co. Ltd. for about $21 million.
Four of the five sales, including Kiahuna, came just days before a government debt-disposal agency in Japan forced Sports Shinko into bankruptcy on Jan. 28, 2002. The fifth property was sold a couple of months after the involuntary bankruptcy action.
Keijiro Kimura, deputy trustee for the Sports Shinko estate, is investigating suspected fraudulent property transfers by Sports Shinko in hopes of recovering assets for creditors, including Japan's government-operated debt-disposal agency Resolution and Collection Corp.
Kobayashi declined comment through a spokesperson. The spokesperson, who represents the developer's companies involved in the Sports Shinko transactions, would not discuss the trustee's inquiry, but noted that no legal action has been taken involving the Kobayashi deals.
Under Japanese bankruptcy laws, the trustee has the power to rescind contracts and fraudulent or preferential transactions by a debtor. Kimura last November petitioned the Hawai'i District of U.S. Bankruptcy Court to pursue his case, which in February was allowed to proceed.
Since then, local law firm Alston Hunt Floyd & Ing has subpoenaed property sale information and other documents from another Honolulu law firm, McCorriston Miller Mukai MacKinnon LLP, which has done work for Sports Shinko subsidiaries in Hawai'i.
Previously, Kimura had not disclosed which Sports Shinko asset sales, which were also made in California and Florida, were the subject of his investigation.
But in a March 14 filing to compel production of Sports Shinko documents, Alston Hunt attorney Glenn Melchinger declared that Kimura believes that Sports Shinko subsidiaries may have claims related to the Kobayashi transactions.
Melchinger also noted that attorney Frank Mukai of McCorriston Miller was a former director of Sports Shinko Hawai'i subsidiaries and counsel for a Kobayashi company.
A representative of McCorriston Miller could not immediately be reached yesterday.
Besides Kiahuna Golf Course, Sports Shinko properties bought by Kobayashi companies were the Queen Kapi'olani Hotel for $3.3 million, Ocean Resort Hotel Waikiki for $5.5 million, Mililani Golf Club for $5.3 million and Pukalani Country Club on Maui for $4.3 million.
None of the other former Sports Shinko hotels or golf courses are being sold, according to the Kobayashi company spokesperson.
One other Sports Shinko hotel, the Diamond Head Beach Hotel, was sold long before the bankruptcy in March 2001 for $4.5 million to local developer Peter Savio.
Sports Shinko paid roughly $164 million for three golf courses and three hotels in Hawai'i during the late 1980s. It sold all those properties for $25.7 million.
The new owners of Kiahuna, known as Kiahuna Players LLC, did not have an estimate of how much they plan to spend refurbishing the course designed by Robert Trent Jones Jr.
"We live here, so we want to take care of (the course) and continue to serve our loyal core of local golfers," said James Massaro, one of the nine buyers and new general manager of the golf club. "We are very excited about the possibilities here."
Massaro credited employees who kept the course running over the years and promised to offer higher wages and improved benefits.
Nine part-time employees and one full-time employee were laid off as part of the sale, but the new owners said they will offer at least seven full-time positions to those who lost their jobs.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
Correction: Tom Batey was an assistant to former Mayor JoAnn Yukimura. His previous employer was misidentified in a previous version of this story.
