For the second time in less than a decade, the owner of roughly 1,800 acres of agricultural land in Upcountry Maui once envisioned for housing is trying to avoid foreclosure.
L&E Ranch, which does business as Waiakoa Ranch, filed for Chapter 11 bankruptcy protection earlier this month.
The company, led by Janet Coflin, was in the midst of foreclosure litigation initiated in state court last year by Romspen Investment Corp., a mortgage financing company based in Canada.
Two Maui dentists who are married to each other, Dean Arashiro and Margaret Garcia, also sued L&E last year and won a judgment. In the bankruptcy filing, L&E said it owes Arashiro and Garcia $1.3 million for loans the couple made to L&E.
L&E claims that it has assets with an estimated value of $50 million to $100 million and that it expects it will be able to at least partially repay creditors whose claims are not secured by assets.
The company did not list debts held by creditors with secured claims, so it was unclear how much Romspen is owed and whether there are other secured creditors. However, L&E estimated in the Nov. 10 bankruptcy filing that its total debts add up to less than $10 million.
According to property records, L&E bought the Upcountry land in 2013 for $15.6 million. Maui County’s Real Property Assessment Division lists the fair market value for the property at $13.4 million.
Coflin could not be reached for comment, and L&E’s bankruptcy attorney Steven Guttman did not return calls seeking comment.
The Waiakoa Ranch land at issue was once part of Maui Land & Pineapple Co. operations. A development partnership called Kula 1800 Investment Partners LLC bought the property in 2006 for $22.9 million and attempted to create an “agricultural subdivision” for 86 home sites each between 5 acres and more than 40 acres.
Such projects are sometimes referred to as gentleman’s farms because they are allowed under lax state and county regulations that generally permit one or two “farm dwellings” on lots as small as 2 acres zoned for agriculture if the home or homes are accessories to a primary agricultural operation. What qualifies as an agriculture operation, however, is not defined or monitored.
Kula 1800 included Maui contractor Steve Goodfellow and developer Michael Rosenfeld of Woodridge Capital. Maui Cattle Co., which leased the site for grazing, also was a partner.
But in 2009, after the local housing market began to deflate amid a national recession, an affiliate of lender iStar Financial filed a foreclosure suit alleging that Kula 1800 owed it about $18 million that was in default.
At the time, a representative of the developer said the county had granted a preliminary subdivision approval in 2006 but that there were delays drilling water wells to supply the Waiakoa Ranch subdivision.
iStar acquired the property through foreclosure in 2010 and then sold it to L&E three years later.
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