A new court-approved management team has been installed to operate the financially stricken RightStar group of cemetery and funeral services companies here.

Circuit Judge Sabrina McKenna, who has overseen the companies since foreclosure proceedings were first filed in 2004, yesterday approved a request from the state attorney general's office and Vestin Mortgage of Las Vegas to appoint a group of experienced "death care" professionals from the Mainland to improve operations and finances at the RightStar companies.

Efforts earlier this year to publicly auction the companies were cancelled after no bidders came forward who were willing to pay the minimum asking price of $25 million set by the state and Vestin.

Vestin financed the 2001 purchase of the RightStar companies by a small group of Mainland buyers and filed foreclosure proceedings against the borrowers in 2004, claiming they defaulted on repayment of more than $35 million in loans.

McKenna yesterday released Guido Giacometti, who served as court-appointed receiver at RightStar since 2004, and approved the appointment of retired Circuit Judge Marie Milks as "commissioner" overseeing RightStar operations.

'PRE-NEED' PLANS

The new management group is headed by Dusan "Duke" Radovich, a cemetery and funeral services company operator based in Kansas City, Mo.

Radovich yesterday acknowledged offering to buy the RightStar companies several years ago but said he did not offer an auction bid this year because he felt the $25 million minimum asking price was too high.

He said the first order of business for the new management team will be to finally submit audited statements of RightStar's finances to state regulators.

A heavily redacted copy of the new team's management plan was filed with McKenna, but large portions of the version of the plan available to the public have been removed to "protect sensitive business information," according to papers filed by the office of Attorney General Mark Bennett and Vestin Mortgage. Those parties originally tried to file the entire plan under seal but McKenna ordered sections of it available to the public.

The RightStar companies are the largest operators of cemeteries and funerals in Hawai'i, with nearly 50,000 customers statewide holding "pre-need" contracts for services to be provided when loved ones die.

RightStar owns Valley of the Temples and Diamond Head Mortuary on O'ahu, Maui Memorial Park, and Homelani and Kona Memorial Parks on the Big Island. RightStar also owns several companies that sell and administer "pre-need" funeral plans, including 50th State Funeral Plan.

The state consistently has said that all outstanding RightStar pre-need contracts will be honored.

LAWS TAKE HEAT

One portion of the business plan open to the public says the new management "intends to aggressively market funeral, cemetery and cremation arrangements on a pre-need basis."

A leading national funeral services consumer group, the Funeral Consumers Alliance, has been harshly critical of Hawai'i laws governing operation of such pre-need plans, saying they are among the most lax in the country.

Efforts by the FCA and others to reform the laws have repeatedly failed to win support of state officials and legislators.

Bennett's office has filed civil lawsuits against the former operators of RightStar, alleging that they fraudulently removed between $20 million and $30 million from company trust funds between 2002 to 2004. Those suits are still pending.

Only one criminal charge has been lodged in the case, against former RightStar President John Dooley. He was indicted in late 2006 on a theft charge and was recently arrested in Oregon and returned to Hawai'i to face trial.

Dooley, who has previously denied any wrongdoing, is being held on $100,000 bail.