HONOLULU (AP) - Maui Divers Jewelry has withdrawn its $1 million offer to buy Hilo Hattie, a major retailer of Hawaiian souvenirs and aloha attire, out of bankruptcy.
The announcement came Tuesday after Maui Divers entered into an agreement to remain the sole jewelry concessionaire at Hilo Hattie's seven island stores.
Hilo Hattie filed for Chapter 11 bankruptcy protection in October 2008, citing the economic downturn and the slumping tourism industry.
Maui Divers, Hawaii's largest jewelry manufacturer and retailer, is now giving its support to the reorganization plan offered by Royal Hawaiian Creations, a garment manufacturer whose owner, Donald Kang, obtained control of Hilo Hattie through a stock purchase last month.
Royal Hawaiian Creations is the largest unsecured creditor in the bankruptcy case and is now the only entity with a bid to bring Hilo Hattie out of bankruptcy.
Maui Divers President and Chief Executive Bob Taylor said Maui Divers ''is pleased to continue our long and productive association with Hilo Hattie.''
''Don Kang presented us with a strong reorganization plan for renewed success, and after careful consideration, we believe it is in the best interests of Hilo Hattie creditors and other stakeholders for us to withdraw our purchase proposal,'' Taylor said. ''We are confident that with Don and his management team at the helm, we can continue to move forward toward our mutual goals.''
Kang said he was pleased that Maui Divers is continuing its relationship with Hilo Hattie, since ''they are a strong brand with an excellent reputation for quality and craftsmanship. All parties are happy we have reached an amicable solution that allows Hilo Hattie to move forward toward a bright new future.''
Maui Divers had offered $1 million to buy Hilo Hattie, along with $2 million in capital. Kang is offering $1 million in immediate cash and $2 million obtained through financing.
A U.S. Bankruptcy Court hearing to determine Hilo Hattie's fate is scheduled for July 15.
