Hawaii files $49m DFS claim

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According to local media reports, the state of Hawaii is suing DFS Group for $49m in back rent

The state's action was initiated in response to the recent revelation that the company had made loan repayments of around $100m to majority stakeholder LVMH Moet Hennessy-Louis Vuitton while refusing to pay rent owed to the Department of Transportation. The $49m comprises lease and permit rents, plus interest and late charges.

DFS was formally notified of the claim on Friday, and vice-president Sharon Weiner argued that the amount stated did not represent DFS's true debt to the state. "DFS does not agree that the amounts stated are due and owing," she said. "The aftermath of September 11 and the Iraq war have decimated revenues at Hawaii's airports. These sorts of events were never contemplated at the time we signed these concession leases. This unprecedented change of circumstances justifies relief from the now onerous terms of the concession leases."

Previously Hawaii governor Linda Lingle had told DFS she was open to negotiations once the $25m owed at the end of last year had been repaid, but talks stalled when DFS offered only a fraction of the amount.

In an interview with DFNI last week, Hawaii State Department of Transportation Airports Division property manager Ross Smith said: "The governor informed DFS that if DFS paid the rent owed for the in-bond concession up to December 31, she would be willing to discuss DFS' circumstances on a go-forward basis. The State has calculated that DFS owes about $25m on the in-bond concession."