A major Hawaii commercial refuse and recycling firm that has been struggling financially will be sold at a court auction early next year in an effort to keep the business running.
Rolloffs Hawaii LLC is scheduled to be sold Jan. 4 in U.S. Bankruptcy Court in Honolulu, and already two competing local trash hauling companies have committed to bid.
Rolloffs sought Chapter 11 bankruptcy protection on Friday under the weight of about $9 million in debt.
As part of preparing the Chapter 11 case, the company lined up a purchase offer from West Oahu Aggregates for $5 million. Another firm, Honolulu Disposal Service, has since committed to pay $5.2 million for the struggling company. The auction will allow the two competing firms, and others if interested, to keep bidding in $30,000 increments until a high bid is reached.
“It should be interesting,” said Jerrold Guben, a local bankruptcy attorney representing Rolloffs. “It’s a fast-moving Chapter 11.”
As it is now, Rolloffs is operating normally under court protection from creditors that include the City and County of Honolulu, which claims it is owed
$2.9 million for waste dumped at city facilities.
Rolloffs, which has served Hawaii for more than 40 years and is recognizable by its red trucks and bins, has contracts with a variety of large companies including Outrigger Hotels, Foodland Super Market, McDonald’s, Chevron and a contractor at Ala Moana Center. The refuse company had revenue of $29 million in 2015.
Guben said he didn’t have information about how Rolloffs got into financial trouble, but the company owes American Savings Bank $6.5 million.
The bank, which has a claim on Rolloffs assets securing its debt and is entitled to be paid back before other creditors, agreed to selling the company’s assets and will allow some of the sale proceeds to at least partially repay junior creditors, Guben said. How much other creditors receive will depend on the sale price.
The city is the largest creditor after the bank. The next largest creditors are Garlow Petroleum Inc., owed $205,870; Pyramid Insurance, owed $90,639; and PVT Land Co., owed $67,150.
Rolloffs has 83 employees and about 70 vehicles, according to the bankruptcy filing.
The company is an affiliate of Trashmasters LLC, which was formed in 2009 and is a holding of California-based private equity fund Corridor Capital LLC. Trashmasters was formed to acquire and improve underperforming businesses. Corridor CEO Craig Enenstein, who signed the bankruptcy petition for Rolloffs, could not be reached for comment Wednesday.
