‘Office Decoration,’ Lamp, Old Phone Among Items Included as Collateral for Loans to Company

posted in: February 2016 | 0

Financing statements filed with the state’s Bureau of Conveyances don’t usually disclose the dollar amounts of loans, but they do serve as a legal notice of a claim on the property used as collateral.

One such statement filed last summer by the Hawai`i Central Federal Credit Union, in Honolulu, has a collateral list that suggests the institution has a claim on every last piece of movable goods in the Hawaiian Legacy Hardwoods office in Umikoa Village, where the company has its headquarters for field operations in Hamakua.

In addition to a list of farm equipment, leasehold improvements (including a farm nursery), software acquired in 2010 and 2011, and several vehicles – a Mini Cooper (no model year given, but acquired in 2010), a 1988 “International Stake Truck” acquired in 2012), a Pinzgauer acquired in 2012, and a 2007 Toyota Tundra – are items more likely to be found on yard-sale tables than amortization tables. To mention just a few: two five-year-old computers, unspecified “office furniture,” “china acquired 10/26/12,” “lamp acquired 10/26/12,” and a “phone acquired 2/26/10.” There’s also an “office decoration” acquired five years ago, and “organization cost” and “start-up cost.”

The credit union financing statement lists Hawaiian Legacy Hardwoods, LLC, as the debtor, although by the time the statement was recorded, the company’s name had changed to HLH LLC. Earlier in 2015, First Hawaiian Bank filed a financing statement listing HLH LLC as debtor, with collateral identical to a statement the bank first filed in 2013. The bank appears to lay claim to many of the same items attached by the HCFCU statement. The bank financing statement attaches, for example, “all inventory, equipment, accounts … money, other rights to payment and performance, and general intangibles…; all timber to be cut; all attachments, accessions, accessories, fittings, increases, tools, parts, repairs, supplies and commingled goods,” among other things.

FHB’s claim on timber also seems to be duplicated in another financing statement, this one filed by landowner Kukaiau Ranch in 2012. According to that document, the debtor – i.e., Hawaiian Legacy Hardwoods, LLC – “shall not assign, harvest or sell any trees held by it as lessee as part of lessee’s planted share until the end of the lease term, except pursuant to the terms and conditions set forth in the lease.” The lease is not on file with the state Bureau of Conveyances, making it impossible to know what conditions would allow timber harvests.

 

— Patricia Tummons

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