Case filing & court posture: Association of Apartment Owners of Kauai Beach Villas, a Hawaii condominium association, filed a Subchapter V Chapter 11 petition on December 5, 2025 in the U.S. Bankruptcy Court for the District of Hawaii. Dkt. 1 The case is assigned to Hon. Robert J. Faris, with Wayne Mau serving as Subchapter V Trustee. Dkt. 17
Property & liquidity crisis: The resort comprises 150 apartments across 8 buildings (A–H), with 105 units operated as timeshare intervals through PAHIO. Buildings G and H remain unoccupied due to compromised post-tension steel cables. Dkt. 11 At filing, the debtor held ~$3.3M in cash against ~$446K in secured debt to Bank of Hawaii. Dkt. 6
Liquidity & DIP structure: The debtor obtained authorization to use cash collateral of Bank of Hawaii through April 2026. Dkt. 6 Bank of Hawaii holds a lien on the debtor's accounts and rights to assess and collect maintenance fees.
Section 363(h) liquidating sale: The debtor is pursuing a liquidating sale of the entire resort involving approximately 7,000 interval owners. K&L Gates LLP was retained as special counsel to commence an adversary proceeding authorizing the sale. HILCO Real Estate, LLC and a local broker are being engaged to market and sell the Project.
Current status: The debtor intends to file a plan by the March 5, 2026 deadline under 11 U.S.C. § 1189(b). Dkt. 58 The case remains pending; a status conference was continued to April 2026 to apprise the court of the 363(h) litigation progress and proof of claim developments.
