March 7 (Bloomberg) -- 1250 Oceanside Partners and two affiliates, owners of more than 1,800 acres of land on the Island of Hawaii, filed for bankruptcy to restructure more than $500 million in debt.
Oceanside listed assets of more than $10 million in Chapter 11 documents filed yesterday in U.S. Bankruptcy Court in Honolulu. Affiliates Front Nine LLC and Pacific Star Co. also sought court protection.
The restructuring will “allow the debtors’ development projects to proceed, and will permit their respective creditors to receive payment in excess of the liquidation value of their claims,” Craig Pickett, the companies’ sole executive officer, said in court papers.
Assets acquired for the development of Hokuli’a, a luxury real estate project, include a 3 1/2-mile tract along the Kona coast, Pickett said. Oceanside’s creditors include the County of Hawaii, with a claim of $20 million, and Ackerman Ranch Inc., with a claim of $13.4 million, according to court papers.
Developer Lyle Anderson controlled the three companies until 2008, when Bank of Scotland LLC declared a default on about $1 billion in debt and exercised its right to replace the directors, including Anderson.
The debt was secured by projects in New Mexico, Arizona and Hawaii. Sun Kona Finance I LLC acquired the portion secured by Hawaiian assets in December. The total balance due on that debt was about $625.2 million, according to court papers.
The case is In re 1250 Oceanside Partners, 13-00353, U.S. Bankruptcy Court, District of Hawaii (Honolulu).
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