The group that bought the assets of Maui Pineapple Co. paid a fraction of what the company’s equipment, materials, supplies and customer lists were worth, according to a filing with federal regulators.
The partners of Haliimaile Pineapple Co. acquired the equipment and other items for $680,000, to be paid over five years. The assets had a book value of $3 million, according Maui Land and Pineapple Co.’s filing this week with the U.S. Securities Exchange Commission
Haliimaile Pineapple will also pay ML&P (NYSE: MLP) between $20,000 and $30,000 a year to use the Maui Pineapple trade marks, trade names such as Maui Gold, and logos, and will lease 950 acres and 59,000 square feet of office and warehouse space at market rents, which is about $420,000 per year, for 20 years. The new company hired 66 workers of the 206 workers who were terminated by Maui Pine on Dec. 31, which will decrease ML&P’s severance costs, the company said in the filing.
Haliimaile Pineapple was formed by five former Maui Pineapple Co. executives and Ulupalakua Ranch owner Pardee Erdman, who assumed operations from Maui Land & Pineapple Co. on Jan. 1.
In addition to Erdman, the other shareholders, all former Maui Pineapple Co. executives are Doug Schenk, former president; Doug MacCluer and Ed Chenchin, former vice presidents; and Darren Strand and Rudy Balala, who will run the day-to-day operations of the new company.
Maui Land & Pineapple Co. had announced late last year that it was exiting the pineapple business after mounting losses. In a filing last week with federal regulators, the company’s auditors said that Kahului-based ML&P was deeply in debt and may not be able to stay in business much longer.
The closure of its pineapple growing operation last month, which is expected to cost $17 million, and the cutting of 208 jobs, may not ensure the company’s survival, the auditors said.
Stock in Maui Land was off by nearly 9 percent Friday to $4.79.