A federal bankruptcy judge has approved the reorganization plan for the Hokulia development.
The Kona project, begun in the 1990s, and its developer, 1250 Oceanside Partners defaulted on nearly $1 billion in secured debt owed to the Bank of Scotland.
“With the bankruptcy Restructuring Plan approved and financing in place, the West Hawaii community will see a new Hokulia emerge,” manager of debtor entities for Sun Kona Finance I Craig Pickett said in a written statement. “With the issuance of the court’s final written approval in a few weeks, Oceanside’s $20 million obligation to the County of Hawaii to complete the Mamalahoa Bypass Highway will be assured. Moving forward with the development and completion of the Hokulia project is our No. 1 priority.”
Development of the West Hawaii project stopped several years ago. In October 2008, the Bank of Scotland separated the various debts, leaving about $494 million in Hawaii-based debt, secured by Hokulia and a related development at Keopuka, according to court records.
Sun Kona Finance I LLC acquired Bank of Scotland’s loans in late 2012.