New pineapple company to rise from ashes of Maui Land subsidiary
By Star-Bulletin staff
POSTED: 01:32 p.m. HST, Dec 31, 2009
Pride in Island! Pineapple on Maui FOREVER! CLICK for larger image
A group of Valley Isle residents plans to start operating a new pineapple company tomorrow to serve whole fruit customers of Maui Land & Pineapple Co.
The last pay day for Maui Land’s subsidiary Maui Pineapple Co. Ltd. was today.
The new business Haliimaile Pineapple Co. has purchased some of Maui Land’s pineapple equipment and leased 1,000 acres with an option of leasing more land, said Doug Schenk, one of the investors.
Schenk, an investor and a former president of Maui Pineapple Co., said the new company will be employing about 68 people, including about 60 who formerly worked at Maui Land and were ILWU members.
A group of Valley Isle residents plans to start operating a new pineapple company tomorrow to serve whole fruit customers of Maui Land & Pineapple Co.
The last pay day for Maui Land’s subsidiary Maui Pineapple Co. Ltd. was today.
The new business Haliimaile Pineapple Co. has purchased some of Maui Land’s pineapple equipment and leased 1,000 acres with an option of leasing more land, said Doug Schenk, one of the investors.
Schenk, an investor and a former president of Maui Pineapple Co., said the new company will be employing about 68 people, including about 60 who formerly worked at Maui Land and were ILWU members.
Pineapple is BACK! CLICK for larger imagePOSTED: December 31, 2009
The newly formed Haliimaile Pineapple Co. Ltd. announced today it would immediately take over 1,000 acres and related facilities from Maui Pineapple Co., under an agreement signed Thursday with Maui Land & Pineapple Co.
The new company’s first day of work will be Saturday, when employees will start picking Maui Gold fruit, said Doug Schenk, one of the six local partners in the venture.
Maui Pine’s last harvest was Dec. 23. The company had announced it was leaving the business earlier this year after recording continuous, large losses.
The owners and directors of the new venture are Pardee Erdman, owner of Ulupalakua Ranch; Schenk, Doug MacCluer and Ed Chenchin, all retired Maui Pine managers; and two men who were operating directors of Maui Pine until it closed, Strand and Rudy Balala.
Haliimaile Pine has licensed and purchased assets notably the Maui Gold patented variety and leased land, equipment and buildings from Maui Pine.
Haliimaile Pine will do its own marketing, targeting local retailers, hotels and restaurants.
Audit: Maui Land & Pineapple future uncertain as liabilities exceed assets by $60 million
Click for Larger ImageOn Wednesday December 30, 2009, 5:14 pm EST
WAILUKU, Hawaii (AP) — Maui Land & Pineapple Co. says its auditors have found the company’s liabilities exceed its assets by more than $60 million, raising doubts about its ability to survive.
The property developer, one of Maui’s biggest landowners, said in a report filed this week with the Securities and Exchange Commission that it’s counting on being able to sell some of its real estate to raise cash and meet its financial obligations. But the weak real estate market may thwart those plans.
The uncertainty about real estate sales "raises substantial doubt about the company’s ability to continue as a going concern," the report said.
Maui Land provided the report on Deloitte & Touche’s audit to the SEC Monday, the same day it submitted a registration statement announcing plans to sell more stock to current shareholders.
The auditors found the company’s future was jeopardized by its financial losses, weak cash reserves, an inability to meet certain financial obligations and an overall balance sheet showing the company’s liabilities exceeded its assets.
Maui Land has had to write off all the money it initially invested in the Ritz-Carlton Club and Residences at Kapalua Bay, a luxury condo and hotel development that’s suffered from higher-than-expected default rates and lower revenue forecasts for future sales.
Item 2.05. Costs Associated with Exit or Disposal Activities
On November 2, 2009, the Board of Directors of Maui Land & Pineapple Company, Inc. (the "Company") approved the recommendations of the Board of Maui Pineapple Company, Ltd. ("MPC"), a wholly owned subsidiary, to immediately cease planting pineapple and to cease all other pineapple agriculture operations by December 31, 2009. The decision was made due to highly competitive fresh pineapple markets on the Mainland USA in which MPC was unable to recover the high cost of growing Hawaiian pineapple. The Company will eliminate approximately 208 positions, including 193 bargaining unit positions. Termination notices have been issued to employees with termination effective December 31, 2009.
Employee severance costs are expected to be approximately $3.1 million and will be primarily accrued in the fourth quarter of 2009. Severance payments for the non-bargaining positions are expected to be paid on the regular payroll schedules throughout most of 2010. The timing of the severance payments for the bargaining unit positions will be addressed with the International Longshore & Warehouse Union ("ILWU"). Additional one-time termination benefits will be negotiated with the ILWU and MPC is not able to estimate the amount of such benefits. Payments of approximately $0.5 million for accrued vacation balances are expected to be paid before December 31, 2009. The Company has not yet determined the effect on its pension and post retirement plans.
The estimated clean up and other costs related to termination of use of the various properties previously used by pineapple operations are estimated to be approximately $1.3 million, which is expected to be incurred primarily in 2010. Non-cash charges in the fourth quarter of 2009 for fixed assets and materials and supplies, net of estimated sales proceeds, are expected to be approximately $12.5 million. MPC is not currently able to estimate the cost of termination of its private grower pineapple supply contract.
In summary, the estimated total cost of this action (for items currently estimable) is expected to be approximately $16.8 million and the total estimated cash outlay for these items are estimated to be approximately $4.9 million. The Company’s Agriculture segment will be reported as discontinued operations in its next periodic filing.
Hawaii’s once-rich agricultural industry, renowned throughout the 1900s for its pineapple and sugar crops, has suffered another devastating blow.
With the last remaining sugar company hanging on by a thread, Maui Land & Pineapple Co. said yesterday it would stop planting pineapple immediately, cease all pineapple operations by the end of the year, and lay off more than 45 percent of its work force amid a companywide restructuring that repositions subsidiary Kapalua Land Co.
Entry into a Material Definitive Agreement, Creation of a Direct Fin
Item 1.01 Entry into a Material Definitive Agreement.
Amended and Restated Credit Agreement with Wells Fargo
On October 9, 2009, the Company, as Borrower, entered into an Amended and Restated Credit Agreement (the "Amended Wells Credit Agreement") with each of the financial institutions that are parties thereto (the "Lenders") and Wells Fargo Bank, National Association ("Wells Fargo"), in its capacity as a Lender and as the administrative agent for the Lenders. The Amended Wells Credit Agreement amends and restates the terms of that certain Loan Agreement, dated as of November 13, 2007, entered into by and between the Company, as Borrower, each of the financial institutions that are signatories thereto, and Wells Fargo as a lender and as the administrative agent for the lenders named therein, as such was amended from time to time thereafter (the "Original Wells Credit Agreement").
The Amended Wells Credit Agreement principally amends the Original Wells Credit Agreement by:
* increasing the secured revolving line of credit from $45.0 million to $50.0 million;
* providing for the accrual of interest on the principal balance outstanding under the credit facility at (i) the LIBOR Market Index Rate plus 4.25%, (ii) the Federal Funds Rate plus 5.75%, or (iii) the applicable LIBOR Rate plus 4.25%, at the option of the Company, provided that the interest rate applicable to any portion of the principal amount outstanding under the credit facility cannot be less than 5.50%;
* extending the maturity date from March 13, 2010 to March 1, 2011; and
* establishing new financial covenants relating to, among other things, minimum liquidity requirements and total liability thresholds.
Amid all the chatter and bluster of isle politics, there arise from time to time truly historic occasions. One of those is coming down on Maui next month.
On Oct. 15, the state Commission on Water Resource Management will hear closing arguments on the future of the Central Maui watershed. The 9 a.m. contested case proceeding should pack the Iao Congregational Church’s Konda Hall, so interested citizens will want to get there early. No public testimony will be taken.
To draw attention to this fateful session, a public "river walk" will be held this Friday afternoon from Iao Valley to Market Street in Wailuku. At the end of the walk, the Native Intelligence store will host water rights speakers during Wailuku’s "First Friday" festivities. Later the same day, commission staff members will travel to the Paia Community Center to seek public input from 5 to 9 p.m. on East Maui water issues.
The contested case proceeding takes as its prologue a startling "proposed decision" the commission’s hearings officer issued in April. At that time, Lawrence Miike recommended that the commission partially restore the historic flows of Central Maui’s famous "four waters" – the Waihee, Waiehu, Iao and Waikapu streams.
NEW YORK, Sept 30 (Reuters) – A federal judge dismissed a class-action lawsuit accusing Fresh Del Monte Produce Inc of violating antitrust law by using monopoly power to charge excessive prices on a sweet variety of pineapple.
Wednesday’s ruling by U.S. District Judge Richard Berman rejected claims brought on behalf of retailers such as Publix Super Markets and Whole Foods Market Inc, as well as consumers, who bought the “Fresh Del Monte Gold” pineapples beginning in 1996.
The plaintiffs complained that Del Monte Fresh Produce Co, a unit of Fresh Del Monte, issued false and misleading “threat letters” to competitors that said its extra-sweet pineapple, described in court papers as “revolutionary,” was patented. They also said Del Monte threatened lawsuits against rivals that tried to sell the fruit and began “sham patent litigation,” in order to thwart competition and charge “supracompetitive prices for the Gold pineapples.”
Among those rivals alleged targeted by Del Monte were Dole Food Co and Maui Land & Pineapple Co, court papers show.
Yesterday, Gay & Robinson announced that they would cease sugar operations on Kauai this fall, a year earlier than they had previously announced. This will mark the end of sugar production on Kauai.
When Gay & Robinson first announced its intentions in July 2007, there was anticipation that a partnership with Pacific West Energy LLC would merely shift the sugar cane business from consumable sugar to the production of ethanol. Those plans never met fruition.
With the end of sugar production on Kauai, only Maui’s Alexander & Baldwin’s Hawaiian Commercial & Sugar Co. remains as the only producers of sugar cane in Hawaii. Poor economic conditions and drought conditions on Maui have cast a shadow on the future of sugar on Maui.
It is not beyond comprehension that within a few short years, Hawaii’s two iconic agricultural products, sugar cane and pineapple, may be no more. Currently Maui Land & Pineapple Co. Inc. is the only remaining producer of pineapple in Hawaii. Cheaper sources of pineapple elsewhere in the world and huge financial losses have cast doubt about the future of that operation as well.
