WAILUKU - The foreclosure sale of The Ritz-Carlton, Kapalua was confirmed by 2nd Circuit Judge Shackley Raffetto on Tuesday, at a price $20 million higher than the auction on the courthouse steps in May.
The winning bidder, however, was the same, Lehman Brothers Holdings Inc.
The hotel continues to operate under a long management contract, and the change in ownership should be almost invisible to guests and employees.
In Hawaii, foreclosed properties are sold at absolute auction, but when court confirmation is asked for, new bidders can reopen the auction by offering 5 percent more than the closing bid.
Christopher Lau, the commissioner for the auction, said that is what happened Tuesday. One other bidder reopened at $78,750,000, 5 percent over the $75 million bid in May. Lehman, bidding with the debt it held against owners W2005/Gengate Realty, prevailed at $95 million.
The employees, nearly 500, are not directly affected by the change in ownership.
The hotel, built in 1991, was closed for part of 2007 for a massive renovation and creation of part of its rooms into condominiums. The reopening just about coincided with the crash of Wall Street, and Gengate defaulted on a primary loan.
With back interest, the debt at one point neared $300 million.
The lenders forebore to foreclose but finally did so in March, when the amount owed was about $268 million.
The hotel has 262 guest rooms, 34 executive suites, 73 residential suites and extensive public rooms and commercial spaces and restaurants.
