Posted on: Saturday, February 12, 2005

Judge OKs use of $6M for Unity House expenses

Advertiser Staff

A federal court-appointed receiver can now use the $6 million from Unity House's sale of the former NCR building on Kapi'olani Boulevard to pay for expenses of the nonprofit agency.

U.S. District Judge David Ezra yesterday approved a request by receiver EG&G Technical Services Inc. to use the money from the sale of the building for "necessary and proper expenses" for the $42 million Unity House.

Anthony Pounders, operations manager for EG&G Technical, said in court papers he wants to apply up to $4 million from the sale to pay down Unity House's margin debt. Unity House is borrowing about $8 million on margin against $14 million in stock investments, he said.

Margin trading involves borrowing money to buy stock and using your investment as collateral. Buying on margin increases the gain if the stock price rises, but also increases the loss if the price falls.

According to the Smith Barney securities brokerage firm, Unity House's investment adviser, a stock market decrease of 10 percent would "severely damage" the stock assets, Pounders said.