by Andrew Walden

There is no end to the Al Hee scams.  That’s the allegation in a lawsuit filed February 8, 2021 in Honolulu Federal Bankruptcy Court. 

According to the complaint filed by Bankruptcy Trustee Michael Katzenstein,  Clearcom, a Hee family company, has been receiving payment under-the-table from Oceanic Time Warner, Charter, and possibly others, for use of Paniolo inter-island high speed data and communications cables which are supposedly controlled by the Trustee pursuant to the ongoing Sandwich Isles/Paniolo bankruptcy proceedings. 

Excerpts from the Complaint:

1. Plaintiff MICHAEL KATZENSTEIN is the duly-appointed Chapter 11 Trustee in the bankruptcy case of PANIOLO CABLE COMPANY, LLC (“Debtor” or “Paniolo”), a limited liability company organized and existing under the laws of the State of Delaware with its principal place of business in Honolulu, Hawaiʻi.

2. Defendant CLEARCOM, INC. (“Clearcom”) is a Hawaii corporation with its principal place of business in Honolulu, Hawaiʻi. Clearcom can be served through its Registered Agent, Wendy Hee, 77-808 Kamehameha Highway, Mililani, Hawaii 96789.

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14. On or about March 6, 2020, Waimana Enterprises, Inc., SIC and the SIC Affiliates (including Clearcom) (collectively defined as the “SIC Parties”) entered into a Rule 9019 Settlement Agreement (Post-Judgment) with the Trustee (the “Settlement Agreement”) which provides, in paragraph 8:

Representation and Warranty Regarding Third Parties. Except as set forth in Exhibit 2 hereto, the SIC Parties hereby represent and warrant to the other parties that there are no agreements of any nature (including without limitation, grants of Indefeasible Rights of Use (IRUs), wholesale contracts, or commercial agreements) permitting persons or entities other than SIC to use capacity on the Paniolo Cable System other than the two pairs of fiber reserved to SIC for the purposes stated herein.

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16. Upon information and belief, in violation of the Lease Agreement and the express warranties made by Clearcom and SIC in the Settlement Agreement, Clearcom has been using and “subletting” capacity on the Paniolo Cable Network without the knowledge, permission or authority of the Trustee.

17. Upon information and belief, Clearcom has entered into one or more agreements with Time Warner Entertainment Co. L.P. dba Oceanic Time Warner Cable, predecessor by merger into Time Warner Cable Enterprises LLC (“Charter”) which permitted Charter to use capacity on the Paniolo Cable Network without the permission or authority of Paniolo or the Trustee. Upon information and belief, Charter has used and continue to use such capacity, paying monies to Clearcom, which has converted or attempted convert such monies for its own use and benefit. Indeed, SIC has expressly admitted that such funds belong to the Trustee by attempting (in violation of the automatic stay) to improperly setoff such funds against SIC’s purported claims against the Trustee.

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29. On February 5, 2021, the Trustee made written demand that such funds be turned over, however Clearcom has failed and refused to do so.

WHEREFORE, PREMISES CONSIDERED, Plaintiff respectfully requests as follows:

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B. That this Court find and determine that Clearcom breached the terms of the Settlement Agreement with the Trustee by, among other things, failing to disclose the existence of its agreement with Clearcom;

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D. That this Court order Clearcom to turn over all funds collected in respect of its use of capacity and in respect of use by third-parties who contracted with or otherwise gained access to the Paniolo Cable System by, through or under the SIC Parties….

read … Complaint