The $262 million sale of Oahu real estate assets of Kaneohe Ranch Co. and the Harold K.L. Castle Foundation moved forward Wednesday after one beneficiary settled a legal petition that raised concerns that the deal was being rushed and hadn’t been properly vetted.
The sale involves roughly 600 acres, including about half of downtown Kailua, Kaimuki Shopping Center, Windward City Shopping Center and Pali Palms Plaza and agricultural land.
The petition filed by Jeremy C. Baldwin in Circuit Court was settled without a hearing Wednesday after about two hours of private talks involving Judge Derrick Chan.
The settlement allowed the descendants of Harold K.L. Castle to go ahead with a vote on whether to accept the offer from an unidentified public company, according to Michael Rudy, a local attorney representing Baldwin. It was not clear whether the vote took place Wednesday nor the result of the vote.
Rudy said Baldwin was pleased with the petition’s resolution. "We’re happy with the settlement," he said. "Our needs were addressed."
Baldwin filed the petition seeking postponement of the vote, alleging that Bank of Hawaii, the trustee for 26 local family trusts with stakes in the real estate assets, didn’t do enough independent analysis on the merits of the proposed sale to an unidentified public company.
The petition said the bank, which recommended sale approval and gave beneficiaries just a few days’ notice to decide, relied too heavily on an analysis and recommendation by Kaneohe Ranch, whose employees stand to be rewarded greatly in the sale.
Mitch D’Olier, president and chief executive officer of Kaneohe Ranch Management Ltd., would receive an estimated $13.2 million through the sale, according to a summary of the transaction. Other company employees would share $1.8 million. Carlton Au, the firm’s chief financial officer, would receive $298,122, the summary said.
Bank of Hawaii declined to comment on the petition. D’Olier declined comment.
A collection of mainland real estate also marketed for sale is not part of the $262 million deal. The transaction summary said Kaneohe Ranch is retaining the mainland portfolio valued at $160 million at this time.
The land being sold stems from the assets of Harold Kainalu Long Castle and his wife, Alice Hedemann Castle. Harold Castle bought 9,500 acres in the Kailua area in 1917, and helped establish the town by donating land for churches, Castle Hospital, schools including Castle High School and Hawaii Loa College, and the land that became Marine Corps Base Hawaii.
Castle died in 1967 and left some of his assets to a private charitable foundation in his name, while other assets were passed to descendants in the form of Castle family trusts.
