HONOLULU -- Hilo Hattie on Monday announced it has been sold to the owner of Royal Hawaiian Creations, a Hawaiian clothing manufacturer.

Since Hilo Hattie filed for Chapter 11 bankruptcy reorganization last fall, it has lost more than $3 million. It has only able to keep operating because landlords at its seven store locations, like Ala Moana Center, are waiving the rent, equal to $167,000 a month.

The sale went to Bum Sik Kang, the principal owner of Royal Hawaiian Creations. RHC's apparel is sold at many Hawaii department stores.

Kang promised to add $1 million of capital to the company immediately and another $2 million after the company pulls out of bankruptcy.

RHC is one of the companies that Hilo Hattie owed a significant amount. One of the company's largest creditors, jewelry company Maui Divers, which is owed more than $1 million, earlier made a bid for the company.

A bankruptcy judge on Monday gave the company until June 29 to deliver a reorganization plan. If the plan is not approved, Hilo Hattie could face Chapter 7 bankruptcy, a complete liquidation of the company, meaning it closes its doors for good.

Hilo Hattie's Chief Operating Officer Ted Nelso and President John Scott resigned with the sale of the company.

"During the last year, with all of the challenges faced by Hilo Hattie, there were a number of vendors and suppliers who went out of their way to help us meet our objectives; none was more helpful than Mr. Kang. I know that the Hilo Hattie team will enthusiastically welcom Mr. Kang as the new head of the Hilo Hattie Ohana," Scott said in a written statement.