Possible sale of Naniloa Volcanoes Resort in the works

Published On: Dec 24 2013 07:30:08 AM HST
Updated On: Oct 22 2013 11:53:11 AM HST

A possible sale in the works for Hilo's Naniloa hotel after a doomsday scenario played out before the state land board earlier this month.

HILO, Hawaii -

A possible sale is in the works for the Big Island's beleaguered Naniloa Volcanoes Resort.

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A bankruptcy judge was told on Monday that there were three offers submitted, but that one was thrown out.

Starwood and Outrigger Hotels told KITV they had been working with potential owner groups about what it would take to overhaul the aging structure.

Three bids have been submitted so far.  The Hawaii Tribune-Herald said two of the bids meet qualifications.

Court documents show that a California company is offering $3.5 million to buy the hotel.  The America Asia Travel Center and two individuals, Nirmal Kumar and Ramesh Machancda, filed papers indicating they are willing to take over the bankrupt resort.  They are also willing to pay the $473,000 that Hawaii Outdoor Tours owes the state for defaulting on its land lease.

Bankruptcy trustee David Farmer says a federal bankruptcy judge will consider a motion to sell the hotel on Nov. 6.

The top qualifying bid will be up for consideration at the hearing, but Farmer said other bids will also be accepted.  This will give other potential buyers a chance to make a better offer.

Hawaii Outdoor Tours Inc. defaulted on a $10 million loan it used to buy the hotel. The resort went into foreclosure last year.

Hawaii County has cited the hotel for about two dozen building code violations.  One wing remains closed after being gutted during previous renovations.  The kitchen is also closed. 

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