Bankruptcy Auction Postponed for Hilo Brewery
Monday’s scheduled bankruptcy auction of a Hilo-based brewery was postponed after a last-minute bid was submitted by an Oahu brewery.
Although Aloha Beer Co. did not submit a formal written bid by last Thursday’s deadline, according to a report in the Honolulu Star-Advertiser, US Bankruptcy Court Judge Robert Faris agreed to reschedule the auction to this Friday to give Aloha Beer time to submit a written purchase agreement.
Aloha Beer Co.’s bid of $325,000 for Hawaii Nui Brewing LLC could lead to a bidding contest between it and Hawaii Nui’s previous owner.
Hawaii Nui Brewing LLC, makers of Mehana and Hawaii Nui beer brands, filed for Chapter 11 bankruptcy on April 10.
A few weeks later, the bankruptcy filing was challenged by a group that included Hawaii Nui’s landlord and Dustin Shindo, who asked Faris to convert the bankruptcy, remove Hawaii Nui senior management and liquidate the company’s assets.
Dustin Shindo founded Mehana Brewing Company in 1995. Hawaii Nui Brewing and Mehana Brewing Company merged in 2009 with Hawaii Nui, relocating its bottling operations from the mainland to Mehana’s facility in Hilo.
Shindo later sold his share of Hawaii Nui Brewing for $350,000 with the agreement that he be paid over a period of time.
The newspaper reports that when Hawaii Nui went bankrupt last month, Shindo was still owed the majority of that money.
In an effort to recoup the money still owed to him, Shindo submitted a $250,000 bid for Hawaii Nui’s assets through a partnership he created with local businessman Duane Kurisu called Hilo Brew Works LLC.
Hilo Brew Works’ bid is not for cash, rather it would effectively serve as a credit for the debt Shindo is owed.
The current owners of Hawaii Nui also submitted a bid of $250,000 for the brewery, with the intent of investing that money in the company and restructuring its debts.
While Hawaii Nui’s current owners have indicated that they will not try to outbid Aloha Beer, Shindo has suggested that his firm may submit a higher bid in order to edge out the Oahu-based brewery.