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The Honolulu Advertiser
Posted on: Saturday, January 20, 2007

Mansion sold off in bankruptcy

By Andrew Gomes
Advertiser Staff Writer

Andre Tatibouet built this Diamond Head home, but has been unable to sell it, even at auction. Now a bankruptcy court has intervened.

ADVERTISER LIBRARY PHOTO | 2003

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A few creditors of Andre Tatibouet are buying the local hotelier's Diamond Head mansion for $7.5 million after a U.S. Bankruptcy Court auction last month failed to attract a $9.8 million minimum bid.

The creditors doing business as BST Waikiki LLC made their offer after the Dec. 5 auction deadline passed without attracting any qualified bids, and the court on Tuesday accepted the offer during a hearing at which no one else offered more.

BST expects to complete its purchase in about 30 days.

The sale disposes of the last significant asset in Tatibouet's nearly 2-year-old bankruptcy case, which initially listed $42.1 million in assets and $68.6 million in debts.

But the 13,000-square-foot home with a private elevator leading to a 2,000-square-foot master suite fetched well below several previous expectations.

In September 2004, Tatibouet first listed the plantation-style house, which he had custom-built about five years ago at 3131 Noela St., for $19.9 million. The asking price was later reduced several times. The city, for property tax purposes, values the house and land at $11 million.

Proceeds of the home's sale will pay off a variety of creditors, according to court records.

Thomas Foley, a local attorney representing BST, said the buyers plan to list the home for sale after fixing up parts of the house that were never completed or need replacing, including the kitchen, laundry room, landscaping and pool deck.

"The residence needs a lot of work," he said.

BST includes investors from California and Hong Kong who loaned Tatibouet $400,000 to help him to pay off some creditors and renovate his Coral Reef Hotel.

Tatibouet lost ownership of the hotel, now called the Aqua Wave Waikiki Hotel, last month after defaulting on a $40.5 million loan late last year. An affiliate of lender Canyon Capital Realty Advisors acquired the hotel in lieu of foreclosure.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.