Ownership of Heritage Holding to Be Decided

Before a bankruptcy court judge can decide the fate of Heritage Holding Inc., he must first rule on who owns it.

Two parties claim ownership and presidency of the real estate company, which drew attention in August, 1991, by suing defense contractor Northrop Corp. The lawsuit alleges that Northrop tried to sell Heritage 53 acres in Anaheim without disclosing that the land was contaminated by chemicals.

Whether the suit goes forward depends on whether Heritage and its subsidiary, Horizon Development Inc., survive the bankruptcy proceeding.

In a hearing scheduled for Wednesday, one of Heritage’s largest creditors, CSI Finance USA Inc. of Santa Monica, plans to propose paying as much as $1.5 million to other creditors and to forgive most of Heritage’s $23.5 million in loans from CSI in exchange for company stock, said Masao Horiuchi, president of CSI. The proposal is contingent on Laurie J. Frost having nothing more to do with Heritage or Horizon. Horiuchi says Frost is a former president of Heritage who was replaced by Kumiko Kato.

Frost, however, also claims ownership and current presidency of the company, said Alan Tippie, a Los Angeles attorney Frost hired to represent Heritage.

“It’s confusing until the court decides who represents the company,” Tippie said.

Heritage, formerly Taiyo Development USA Inc., has offices in Torrance and Newport Beach.

Three creditors other than CSI filed a petition in August alleging that Heritage owed them a total of $917,000 and seeking to force a liquidation of the company under Chapter 7 of the U.S. bankruptcy code.

Last month, U.S. Bankruptcy Judge John J. Wilson ordered Kato to take over as president of Heritage and to assume control of the Horizon subsidiary. Wilson also approved a petition by Kato and supporters to allow the companies to reorganize under Chapter 11 of the bankruptcy code rather than be liquidated.

Frost is contesting those decisions, Tippie said.