Contractors have been building the plant since 2009, but sources say that the company severely underestimated the cost of construction, which has delayed the completion of the plant.
Initially, the facility was supposed to cost roughly $20 million, but the price quickly rose to about $50 million thanks to unexpected increases in the costs of design and raw materials. When funding for the project threatened to run out, the company turned to bankruptcy, according to sources.
The largest investor in Big Island Carbon, Denham Capital, is trying to find an outside entity willing to purchase the company so it can complete construction of the plant, sources say. To this end, Denham officials are working with the bankruptcy trustee to locate a willing buyer.
The bankruptcy filing could be just a temporary hiccup for Big Island Carbon, which launched in 2009 with promises of creating new high-tech jobs, adding diversity to Hawaii’s economy, and producing a large amount of "green" products.
Sources say the company planned to produce "granular activated carbon," which would then be sold to pharmaceutical companies and other outfits that needed the unique product.
But unexpected construction costs proved to be too big a burden for Big Island Carbon, which reportedly owes $16.4 million to its secured creditors, including a $5 million debt owed to Synergy Bank in McKinney, Texas.
More importantly, though, Big Island Carbon reportedly owes $11.5 million in principal and interest payments to Kona Investment Holdings LLC. The company also owes almost $400,000 to a wide range of unsecured creditors.
Of this figure, at least $150,000 is owed to the Department of Hawaiian Home Lands, which leased the four-acre site on which the company still hopes to complete its plant.