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The Honolulu Advertiser
Posted on: Wednesday, September 10, 2003

Cemetery bankruptcy case dismissed

By James Gonser
Advertiser Urban Honolulu Writer

A judge has dismissed the Honolulu Memorial Park bankruptcy case, saying the owners failed to file a plan by the Sept. 2 deadline.

The action leaves the future of the park and its landmark pagoda in doubt and comes just days after owners closed the cemetery.

The ruling by U.S. Bankruptcy Judge Robert J. Faris left open the possibility that a plan still could be accepted if filed in a timely manner by an interested party.

The Friends of Honolulu Memorial Park has been negotiating with the cemetery's owners to take over control of the park and save its pagoda.

Attorney Christian Porter, who represents the Friends group of niche and plot holders, yesterday said they continue to work closely with the Richards brothers. He said he is confident that a reorganization plan will be ready and the cemetery reopened in a couple of weeks.

However, bankruptcy attorney David Farmer said he doubts that will happen.

The options were to convert to Chapter 7 — selling the assets — or dismiss the case, Farmer said.

"Those were the only two things that could happen. The reason why conversion to Chapter 7 wouldn't happen is there is nothing for a trustee to administer."

Farmer said the dismissal takes the cemetery's future out of the hands of the bankruptcy court and allows for some type of business merger or sale, possibly with one of the neighboring cemeteries.

The pagoda would not likely be saved in such a transaction, he said.

"The pagoda has sentimental value, but not as a viable place to bury people in," Farmer said. "It never made much business sense. It is not an accident they (pagodas) are usually made of marble. You can plug money into the pagoda, but it will need to be repaired again. I think that is what scared away business partners. It is so expensive to repair and maintain."

On Friday, the owners of the financially troubled cemetery ceased operations, cutting off water and electricity, ending maintenance and laying off workers, saying they were losing money with every month of operation.

The Nu'uanu Avenue cemetery is owned primarily by the Richards brothers — Manning, James and Montague. They filed for bankruptcy on Dec. 28, 2001.

When filing for Chapter 11 protection, the owners asserted that the cemetery was bankrupt and estimated that it would take $1 million to repair the 37-year-old pagoda, a replica of the Sanju Pagoda in Nara, Japan.

Attorney Jerrold Guben, who represents the owners, said in March that if a plan was not developed in time, he would ask the court to liquidate the assets and have the park closed.

"We would have to lock the doors," Guben said at the time. "There would be no insurance to cover liability, no operators and no maintenance."

Porter said the Friends are committed to running the park and repairing the pagoda.

He said because it is a complicated transaction with city and state jurisdiction involved and almost everyone working as volunteers, the group was not able to complete a plan by Sept. 2.

He expects to call a meeting of the entire Friends group, between 200 and 400 people, to review final plans soon.

"We have a steering committee trying to do what is in the best interests of everyone, but want to make sure we understand the complete picture and the numerous issues involved," Porter said.

Reach James Gonser at jgonser@honoluluadvertiser.com or 535-2431.