A struggling Oahu fish farm that filed for bankruptcy in November plans to seek investors or a buyer as part of a prospective turnaround plan.

Grove Farm Fish & Poi LLC, which raises moi off Ewa Beach and does business as Hukilau Foods, projects it will take 30 months and $9.8 million to return to profitability.

But Hukilau’s majority owner and creditor, Visionary LLC, led by AOL founder Steve Case, hasn’t agreed to provide the money, and instead is pursuing an outside investment or sale.

The plan to attract an investment partner or buyer was recently approved in U.S.Bankruptcy Court.

The effort could mean a new beginning, or an end, for the company that was the first in Hawaii to commercially produce fish raised in submerged ocean cages.

Commercial fisherman Randy Cates founded Hukilau as Cates International 10 years ago and initially achieved success growing and selling a fish once raised in fishponds and reserved for Hawaiian royalty.

Problems, however, arose several years ago in connection with financing and executing an aggressive expansion plan that involved building a hatchery at Campbell Industrial Park and deploying bigger fish cages.

The $13 million expansion plan sought to boost moi production to 5 million pounds a year, a roughly fourfold increase and enough to generate an estimated $20 million in annual sales.

To help finance the expansion, Case acquired a controlling 51 percent stake in the company in 2006 and renamed it Hukilau.

Visionary paid $500,000 for control of Hukilau, and up until bankruptcy had invested $8.9 million in the aquaculture venture. Early on in bankruptcy, Visionary also committed to lend Hukilau an additional $3 million to help the company reorganize and emerge from Chapter 11.

The National Marine Fisheries Service is another major investor and creditor, having loaned Hukilau $3.8 million secured by company assets and guarantees by Cates and Visionary.

Despite the investments, the expansion didn’t go as envisioned. Cates sued Visionary in June 2010 claiming Case’s firm mismanaged the expansion and ruined a once-profitable business. Shortly after filing suit, Cates was removed as company president, though he remains a minority shareholder.

Ryan Murashige is now Hukilau’s president, trying to overcome fish production and survival issues along with expansion difficulties that have taken a severe toll on company finances. The company reported a $2.3 million net loss in 2009 and about $2.7 million last year, according to court filings. This year through June, Hukilau has lost $753,070.

Hukilau reported that it hasn’t sold any fish since February. A company forecast made late last year projected resuming fish sales this month, but a court filing last month said fish sales aren’t expected to resume until February.

The hatchery, which the company previously said was about half built in 2009, had been expected to be completed late this year, according to a projection Hukilau made in November. Now that timetable has been pushed back in part because of permitting issues, and Hukilau estimates spending $1.6 million on the hatchery project early next year.

Expanding grow-out cages initially was to involve replacing four 3,000-square-meter cages with eight 6,000-square-meter cages. It’s unclear where the company is on this part of its plan, though Hukilau projects spending $3 million on farm improvements over the next two years.

Besides production difficulties, the company with 10 employees suffered a personal tragedy when one of its divers, Jeffrey Barbieto, died in May while working on one of the existing empty cages in the ocean.

Cates, in bankruptcy court filings, has criticized Hukilau management and characterized its latest projections for completing the hatchery and resuming fish sales as unrealistic.

Cates said it takes eight to nine months to produce a 1-pound market-size fish from an egg, but Hukilau has empty cages and no eggs being hatched. Cates also said Huki­lau has had trouble addressing fish survival rates that dropped by more than half since 2009, and called the firm a sick business with a flawed business model.

"The problems run to the very heart of (Hukilau’s) dysfunctional operations with the existing inexperienced management that guarantees (Hukilau’s) failure," Cates said in a written objection to the company’s plan to seek turnaround financing or a buyer.

Visionary filed a response in bankruptcy court to the objection filed by Cates denying his claims.

Marissa Sandblom, vice president at Visionary, said the company won’t provide any additional comment on its turnaround plan or statements made by Cates because the lawsuit by Cates is still pending.