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The Honolulu Advertiser
Posted on: Thursday, February 2, 2006

Hyatt Waikiki owner files for Chapter 11

Advertiser Staff

Japan-based Azabu Buildings Co., which owns the Hyatt Regency Waikiki Resort & Spa, yesterday filed for Chapter 11 bankruptcy protection in Honolulu.

The Hyatt, which Azabu purchased in 1986, is profitable and will not be affected by the filing, said Mac Yamaguchi, agent for Azabu Buildings in Hawai'i and executive vice president of subsidiary Azabu USA.

"The filing will have no impact on the operations of the hotel, its employees or vendors," Yamaguchi said in a news release. "It will be business as usual."

The company also said that the King's Village shopping center, owned by Azabu Buildings subsidiary Azabu USA, has no creditors and that its operations will also be unaffected.

Azabu said its debt results from troubled real estate transactions in Japan related to the bubble economy of the early 1990s. Yesterday's court filings showed Azabu's unsecured debt totaled approximately $4.3 billion as of Oct. 31 and was held by about 35 creditors. All but three of Azabu's principal unsecured creditors are based in Japan, according to the filings.

Azabu spent about $565 million in the 1980s on six Hawai'i hotels and other property, including the Hyatt, Maui Marriott, Ala Moana and Kona Lagoon hotels. But the purchases, made with highly leveraged loans, created trouble for Azabu during the state's economic downturn and Japan's financial crisis in the 1990s.

The company gradually lost control of all but two of its hotels the Hyatt and the Ala Moana Hotel mostly to lenders. Azabu sold the Ala Moana Hotel to Miami-based Crescent Heights in 2004 for $85 million.