Categorized | Business, News

Maui Prince Hotel to close Sept. 16

(Photo courtesy of Maui Prince Hotel)

(Photo courtesy of Maui Prince Hotel)

MEDIA RELEASE

This isn’t on the Big Island, but … ouch.

Statement from Donn Takahashi, President Prince Resorts Hawaii:

The lenders of the Makena Resort, who filed a foreclosure action last week, are unable to meet the funding terms and conditions required by Maui Prince Hotel LLC to continue as the management company for the Maui Prince Hotel and Makena North golf course.  Accordingly, Maui Prince Hotel LLC has no recourse but to give notice to terminate our management contract and cease operations of the hotel and golf operations as of Wednesday, Sept 16.

The closure will put around 380 full time, part time and casual staff out of work.  All employees are being notified today that they will receive up to 60 days’ wages and benefits in compliance with Hawaii’s Dislocated Workers Act (DWA) and the Federal Worker Adjustment and Retraining Notification Act (WARN).

On Monday, Aug. 24, a consortium of lenders led by Wells Fargo Bank filed a foreclosure complaint in Circuit Court of the Second Circuit of the State of Hawaii alleging that Makena Hotel, LLC, who owns the Maui Prince Hotel, Makena Golf, LLC, who owns the Makena golf courses, and other affiliated companies owning land in the Makena Resort, defaulted on their loan that was secured by the Makena Resort.

Maui Prince Hotel LLC has been in discussions with representatives of the lenders to secure funding for the hotel’s payroll and account payables and adequate assurances of the continued funding for the hotel’s future payroll and account payables that were previously the responsibility of Makena Hotel, LLC, as the owner of the Maui Prince Hotel. 

Maui Prince Hotel LLC cannot continue to operate the hotel without adequate assurance that funds will be made available to pay for payroll and operating expenses for the hotel and golf course.  

As of our deadline, Friday, Aug. 28, we did not receive funding from the owner or the lenders to pay for past due account payables, and as of our deadline today, Aug. 31, we had not received a favorable indication from the owner or the lenders that they are willing to guarantee the required funding going forward.  

We understand the lenders are trying to get a receiver appointed by the court as soon as possible so that the receiver can step in and continue the operations of the hotel and golf course with another operator.  We plan to work closely with the receiver during this transitions process.

This is a heartbreaking scenario.  The Maui Prince Hotel is a well-run operation with a great heritage, excellent potential, and wonderful employees that has fallen prey to the economic downturn.  

The majority of these employees have worked at the resort over five years with many going back to opening of the hotel in 1986.  

Maui Prince Hotel LLC and the ILWU will be working in concert to take care of all employees to assist them as much as possible through this difficult transition process.

The lenders have not indicated to Maui Prince Hotel LLC what their future plans are but we are hopeful that ongoing discussions will continue to resolve the funding situation to smooth the transition to the new operator.

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