Maui firm owes residents $10M
The Mortgage Store Inc., a Kihei-based business established in 1996, has filed for Chapter 7 bankruptcy liquidation, owing more than $10 million to more than 100 Maui residents. The company lists debts of nearly $14.7 million, and assets of about $14 million, mostly in personal property and real property.
The company was “not doing that much mortgage business,” said Ryther Barbin, attorney for the company. “People were lending money to the Mortgage Store … and they were taking the money and investing it, doing very well.”
The company “started getting into trouble when values started to go down on properties and there were not enough assets to cover all the liabilities, so they shut down and that’s when they came to me,” Barbin said.
Most of the creditors are holding unsecured promissory notes that were to have given them a 7 percent rate of return, he said.
However, “there are substantial assets … and creditors will get substantial returns,” though it is not likely they will receive 100 percent, Barbin said.
The assets to be liquidated are primarily real properties in Texas “where the economy is in pretty good shape, and so the trustee will liquidate the assets and then pay the money out.”
Both the state Securities and Consumer Protection offices confirmed that securities-related complaints had been filed against the company, but the complaints are just being investigated and are unresolved.