Byline: Vicki M. Young

NEW YORK — Liberty House last week made official its exit from bankruptcy court proceedings.
The 151-year old Honolulu-based department and specialty-store operator received bankruptcy court protection confirmation of its reorganization plan in late January, but the plan’s effective date wasn’t until Thursday. The retailer filed for Chapter 11 in a Hawaii bankruptcy court on March 19, 1998.
John Monahan, president and chief executive officer, said in a statement, “With the reorganization behind us, we now look forward to building on the successes that Liberty House has achieved over the past three years.”
Monahan told WWD Friday that unsecured creditors with undisputed claims more than $5,000 will receive a total of 90 cents on the dollar. They get paid 40 cents on the dollar in cash within 30 days and the balance in notes payable over five years. Unsecured creditors with undisputed claims under $5,000 will be paid in full plus interest within 30 days.
Reorganized Liberty House is owned by two major creditors holding a combined 80 percent stake: Oaktree Capital in Los Angeles and DDJ Capital in Boston, Monahan said.
Liberty House has a $40 million exit financing agreement with Fleet Retail Finance, a unit of FleetBoston Financial.
The Hawaiian retailer, at the time of its Chapter 11 filing, listed assets of $284 million and liabilities of $248.4 million. A weak island economy, increased competition and a downturn in Japanese tourists because of the Asian financial crisis contributed to Liberty’s cash crunch. Tourism accounted for 33 percent of the chain’s sales in 1996, but was cut nearly in half, to a paltry 17 percent, by December 1997. The filing followed a court ruling granting a lender’s request that the company’s six-member board be replaced after the retailer had defaulted on $145 million in loans more than six weeks earlier.
Polo Ralph Lauren Corp. was the largest trade creditor, owed $307,561. Other large creditors were Shiseido of Hawaii, Levi Strauss & Co., Nike, The Warnaco Group and DKNY. Trade creditors owed less than $100,000 included Calvin Klein Juniors, St. John Knits, Liz Claiborne, Tommy Hilfiger and Quiksilver.
The retailer, which at one point employed more than 3,800 and operated 36 units in Hawaii and Guam, employs 3,000 and operates 12 department stores and 8 specialty shops. The company also operates a Web site at, featuring apparel and home furnishings.