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The Honolulu Advertiser

Posted on: Friday, June 6, 2003

Bakery's creditors seek answers

By Andrew Gomes
Advertiser Staff Writer

Three creditors of a dominant Hawai'i wholesale bakery that went out of business late last year have filed a petition to place defunct Hawaii Baking Co. under bankruptcy in an effort to recover possible assets.

The three companies — a local flour mill, food distributor and a Mainland baking co-operative — claim they were owed about $638,000 when Hawaii Baking assets were taken over by two other companies in November.

Attorneys for the petitioning creditors said they weren't sure what happened during the takeover and shutdown of Hawaii Baking and want a bankruptcy trustee to examine whether there were assets that should have been distributed to other creditors.

Christian Porter, bankruptcy counsel for Hawaii Baking, was out of town yesterday and unavailable to comment. Hawaii Baking President James DeYoung could not be reached.

Hawaii Baking, which changed its name to Moanalua Baking Co. Inc. shortly before going out of business, shut down Nov. 16, but simultaneously transferred its distribution assets to Arizona-based First Pacific Food Co. Inc.

Fresh Start Bakeries, a California business with operations in Hawai'i, assumed manufacturing Hawaii Baking products, including Holsum and Oroweat brands, and hired most of Hawaii Baking's roughly 80 manufacturing employees.

At the time, DeYoung informed Hawaii Baking employees in a note that the company was ceasing operations "due to its inability to meet its obligations to numerous creditors."

Andy Kerr, an attorney in Oregon representing the parent companies of Hawaii Baking creditors Hawaiian Flour Mill and HFM Food Service, said Hawaii Baking never explained how it was distributing its assets and why.

"What ever happened to the assets?" he said. "Our client has not at all been satisfied with what was done."

"I'm not sure we understand what happened, either," said Thomas Dee, an attorney representing The Long Co., a Chicago-based baking co-operative to which Hawaii Baking belonged.

HFM has a claim of $4,410 against Hawaii Baking. Hawaiian Flour's claim is $504,349. Long Co. said it is owed $128,828.

Hawaii Baking was once one of the state's largest businesses with an estimated $25 million in annual revenue, and was a close rival to market leader Love's Bakery.

The company, established in 1961 as Holsum (Hawaii) Baking Inc., mainly supplied supermarkets and restaurants with name-brand and specialty breads. Hawaii Baking also operated retail thrift stores, several of which were closed, including ones on O'ahu, Maui and Kona on the Big Island.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.

• Correction: The Holsum brand of bakery goods is made and distributed locally by Love's Bakery. Love's acquired the baking and distribution rights last month from two other companies that assumed assets of defunct Hawaii Baking Co. last November. An earlier version of this story did not include this information.