Developer is ordered to pay condo owners $1.9M in unpaid fees

Residents of the Waikiki condominium Canterbury Place have been declared the winner in a fight against the tower’s developer over disputed utility and maintenance fees.

A federal judge issued an order recently for the tower’s developer, Bruce Stark, to pay $1.9 million to the association of condo owners.

The decision by U.S. Bankruptcy Court Judge Lloyd King helps resolve a long-running dispute that spanned two bankruptcy cases, the last of which started more than a year ago.

Chuck Choi, a bankruptcy attorney representing Stark, said he preferred not to comment on the judgment.

Stark, a high-profile Hawaii condo developer in the 1970s and 1980s who developed Canterbury with a partner in 1977, claimed that the association of condo owners was assessing unfairly high utility and maintenance fees to commercial spaces in the tower he owns, including two restaurants and some retailers.

Stark previously said the restaurants, Todai Restaurant and Singha Thai Cuisine, had encountered difficulties in past years paying full rent, which in turn reduced his ability to pay his share of operating expenses. Stark claimed that Todai, which he evicted in December 2014, owed him $1.1 million.

The association representing the owners of Canterbury’s 146 residential units claimed that Stark had failed to pay about $1 million in building fees, and sued to foreclose against Stark’s commercial units in September 2014.

Stark moved to block foreclosure by seeking bankruptcy protection in January 2015 for his company, 1910 Partners, which owns Canterbury’s commercial space.
During the bankruptcy case, Stark was required to pay new monthly bills in full, but filed counterclaims for what he alleged was overbilling.

King ruled that the association is owed its full claim of $1.3 million for unpaid building fees and nonbankruptcy legal expenses, plus interest. The judge also awarded two law firms representing the association, O’Connor Playdon &Guben, and Revere and Associates, $567,936 in legal fees for the bankruptcy case.

The dispute stemmed from Canterbury’s being developed without separate electricity or water meters for its commercial and residential spaces. Stark developed the tower
with Robert Pulley. Stark later bought out Pulley’s share of 1910 Partners.

An arbitrator decided what the fair share of expenses should be in 2001, but disagreements continued and led to an initial bankruptcy filing by Stark’s company in 2009. Separate meters were installed as a result of settling that case, but again, disagreements persisted.

Under the new bankruptcy reorganization plan confirmed last week in the current case, Stark is to pay the $1.3 million claim over five years but must pay the legal expenses stemming from the bankruptcy immediately.