Waikiki hotelier files for bankruptcy

By Dan Nakaso
Advertiser Staff Writer

Andre Tatibouet, who founded Aston Hotels & Resorts, filed for bankruptcy protection this week, a move that prevented Central Pacific Bank from foreclosing on his Waikiki Coral Reef Hotel.

Tatibouet

Outside of U.S. Bankruptcy Court, Tatibouet remained resolute that he will survive his latest financial setback.

Tatibouet, who started in his family's Waikiki hotel business at the age of 7 and later founded the Hotel Corporation of the Pacific, said: "I still have lots of rubber left on my tires. I expect we'll get this turned around."

In court papers, Tatibouet, 64, said he has $38 million in assets but $50 million of debt.

His principal assets are listed as the Diamond Head home called Pualeilani that he and his wife — Hawai'i Republican Party head Jane Tatibouet — had custom-built four years ago, modeled after the Lodge at Koele on Lana'i; a 4.8 percent interest in the company that owns the Keauhou Beach Hotel, worth between $500,000 and $1 million; and an 80 percent ownership interest in American Motel Acquisition Co. LLC, which has or had an ownership interest in 14 hotels and motels on the Mainland.

Tatibouet's 12,799-square-foot home on Noela Street has several liens on it totaling $16.7 million. Potential buyers on Sunday toured the home's six bedrooms, seven full bathrooms and five half baths, Tatibouet said. The asking price is $19.8 million.

The value of Tatibouet's interest in American Motel Acquisition Co. "is nil," according to his court filings. "All of the listed properties have been or are in the process of being foreclosed."

Tatibouet owns the leased-fee interest in the Coral Reef Hotel on Kuhio Avenue. But it is operated by ResortQuest Hawaii LLC under a management agreement. The Coral Reef had gross revenues in 2004 of $4.7 million and net earnings of $265,000.

It has been running at about 80 percent occupancy and generated net revenue of $151,000 for the first two months of the year. Tatibouet estimated the value of the Coral Reef at $22.5 million.

But several banks and other entities — including the hotel's land owner, the Queen Emma Foundation, Aston President Kelvin Bloom and the state Department of Taxation — have claims against the hotel totaling millions.

Some of the Coral Reef's employees have worked for Tatibouet almost from the beginning, when he developed the hotel 32 years ago. He met with employees on Tuesday and said he expects that his bankruptcy situation will be "invisible" to both guests and employees.

"We'll continue to operate as normal," Tatibouet said. "There will be no change."

Tatibouet's bankruptcy filing is just the latest of legal and financial problems in the last few years.

In January, Central Pacific Bank foreclosed on the Coral Reef after Tatibouet defaulted on mortgage payments. In 2003, Tatibouet had taken deposits from 247 potential buyers and hoped to sell the hotel's units as condominiums, ranging in price from $59,500 to $150,000.

But the landowner, the Queen Emma Foundation, successfully sued to block the sale, arguing that condo ownership could force the foundation to sell its fee-simple interest in the property under the city's lease-to-fee conversion ordinance.

Also in 2003, a Las Vegas company filed a foreclosure suit on Tatibouet's Diamond Head home, claiming he defaulted on a $1 million mortgage; ResortQuest International, which bought Aston from Tatibouet in 1998, claim-

ed that Tatibouet missed a $132,000 interest payment on a $4 million loan that was secured by the home; and Mainland lenders filed a foreclosure suit against Tatibouet, claiming he defaulted on an $8.4 million loan related to his Aston Waikiki Beachside Hotel. Tatibouet ended up selling the Aston Waikiki Beachside for $9.8 million.

The year before, Tatibouet was fired as Aston's president. He had sold the company in 1998 to Memphis, Tenn.-based ResortQuest International and continued as president until a dispute over licensing the Aston brand outside of Hawai'i.

Yesterday, after his court appearance, Tatibouet's thoughts turned to the hundreds of friends and business associates in Hawai'i who have helped him over the years.

"I want them to know," Tatibouet said, "that I'm going to do my level best to take care of every single one of them."

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or at 525-8085.