The new owner of a troubled Kona development has converted a promise to cash.
An affiliate of Sun Kona Finance I LLC, the investment firm that acquired Bank of Scotland’s loans for 1250 Oceanside’s Hokulia project, paid Hawaii County the $20 million, plus interest, to resolve the debt its predecessor owed for the long-planned Mamalahoa bypass.
Sun Kona had until a recently approved reorganization plan effective date — June 18 — to make the payment. But, Restructuring Officer Rick Robinson said it was the right thing to do to make the payment immediately.
After June 18, Sun Kona will be able to help Oceanside “get back to development and make the project successful within the bounds we have,” Robinson said.
Mayor Billy Kenoi was “very clear he wanted that road,” he added.
The county has awarded a portion of the bid for the road construction. Kenoi, in a press release, said he expected to see construction begin this summer.
“It has always been my intention to protect the public’s interest and complete the Mamalahoa Bypass road,” Kenoi said in an emailed statement. “I am very happy with this outcome and I commend Sun Kona for paying this obligation ahead of schedule.”
The reorganization plan a U.S. Bankruptcy Court judge approved last month allows Hokulia to emerge from bankruptcy and permit the respective creditors to receive payments on a proportional basis to their claims from a newly formed Unsecured Creditors Fund, Sun Kona officials said in a press release. Sun Kona acquired the loans in late 2012 and filed for Chapter 11 bankruptcy in March 2013.
“Once the Federal Bankruptcy Court approved our bankruptcy exit plan, we chose to pay the County of Hawaii immediately and honor our commitment as early as possible,” Sun Kona president Craig Pickett said in an emailed statement. “Our strategy at Sun Kona has always been to fulfill the unmet obligations of prior owners to the County of Hawaii and the West Hawaii community.”