Hilo koa mill faces foreclosure
Pacific Business News (Honolulu)
Foreclosure papers have been filed against Koa Timber Inc. and associated companies that form a Big Island logging operation
Old Standard Life Insurance Co. and Summit Securities Inc., both of Spokane, Wash., say Hawaii Forest Preservation LLC and president Kyle Dong defaulted on two loans taken out a year ago. Koa Timber is also Dong's company.
The deals involved are complex -- for example, some cash was raised by selling koa logging rights and then leasing them back -- but the dispute essentially involves payments agreed to but, according to the plaintiffs, not made on millions of dollars lent for koa logging on the northern slopes of Mauna Kea.
The project was held up by community opposition despite plans to confine the logging to dead or dying trees. Dong was able to work with local residents and environmentalists to work out an acceptable plan, but lost time and revenue.
A spokesman for the mill says the creditors' action was unexpected due to earlier meetings that had indicated a willingness to negotiate payment.
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