Lawsuit filed against Hilo Bay Cafe owner


By JOHN BURNETT

Tribune-Herald staff writer

The former owners of Nihon Restaurant have filed suit against the owner of Hilo Bay Café, who plans to reopen her popular restaurant soon at the Lihiwai Street location overlooking Hilo Bay once occupied by Nihon.

The civil suit was filed Oct. 4 in Hilo Circuit Court by attorney Craig Sadamoto on behalf of Steven I. Hironaka and Karen R.M. Hironaka, who owned Nihon and its parent entity, Hilo Trading Co. Ltd. The suit accuses HBC owner Kimberly Snuggerud of breach of contract, claiming that she still owes the Hironakas $102,000 on an $850,000 deal made a year ago to buy Hilo Trading Co. The lawsuit also lists numerous “Doe defendants.”

The suit seeks payment of the money allegedly owed and requests that the Hironakas “be awarded compensatory, general, special and punitive damages … in amounts to be shown at trial or other proof hearing herein.” It also seeks attorneys fees and costs of the suit and “such other and further relief as this court deems just and equitable.”

“Despite repeated demands for Snuggerud to comply with the terms of the agreement and for her to satisfy her obligations thereunder, Snuggerud has failed, refused and neglected to pay monies owed to the plaintiffs under the agreement,” the lawsuit states.

According to the lawsuit and attached documents, the contract, which was entered on Oct. 15, 2012, required Snuggerud to pay the Hironakas $13,080 for all shares of HTC — 1,308,000 shares of common stock at a penny per share. It also calls for a $250,000 payment from Snuggerud to the Hironakas “as their payoff on account of loans they had made to HTC.” The suit also claims an agreement by Snuggerud to assume $586,920 of HTC’s liabilities.

A copy of the agreement, which was attached to the lawsuit, stated that the closing of the deal was to take place on Oct. 31, 2012. The $13,080 for HTC shares and $100,000 were to be paid at closing “in payment of the shareholder loan,” as well as “an amount not to exceed $75,000 … to Lincoln Financial for the notes payable secured by the seller’s investment in the HTC retirement plan.”

An Oct. 2012 balance sheet attached to the lawsuit lists Nihon’s total equity as $750,725.63 and total liabilities of $818,671.44, a minus balance of $67,945.81.

According to the state Department of Commerce and Consumer Affairs website, Hilo Trading Co. Ltd., is a domestic profit corporation in good standing and Hilo Bay Café and Nihon Restaurant are both active trade names owned by HTC.

County property tax records show HTC and the state as the property owners, as the restaurant building sits on Waiakea Peninsula, which is state leasehold land. The 0.97-acre parcel is zoned industrial, and the total taxable value is listed as $1,128,200 — $464,800 for the land and $663,400 for the building, which has a panoramic view of Hilo.

Calls on Wednesday seeking comment by Steven Hironaka, Sadamoto, Snuggerud and attorney Henry Nakamoto, who represented Snuggerud in the drafting of the contract, were not returned by press time Thursday.

Email John Burnett at jburnett@hawaiitribune-herald.com.

 

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