×

Paia Inn files for bankruptcy following harassment lawsuit

The Paia Inn filed for Chapter 11 bankruptcy Friday, with the business owing millions of dollars after being hit with a lawsuit from the U.S. Equal Employment Opportunity Commission earlier this year alleging sexual harassment against female employees.

The filing in the U.S. Bankruptcy Court for the District of Hawaii says Paia Inn LLC has less than $50,000 in estimated assets and up to $10 million in liabilities, including $2.7 million owed to Moby Capital from a “settlement agreement” and $2 million to the U.S. Small Business Administration for an unpaid COVID-19 Economic Injury Disaster Loan.

Beyond those two major creditors, the filing also lists dozens of others owed money on a variety of debts, including $6,320 to Hawaiian Telcom and $4,404 to Central Maui Propane for goods and services rendered.

The bankruptcy filing says the Paia Inn also has “unknown” liabilities for taxes owed to the state, a disputed $131,185 loan, and attorney’s fees from the Law Office of Frederick J. Arensmeyer in Honolulu. Altogether, the filing estimates the Paia Inn’s liabilities to be under $10 million. The filing also lists Michael S. Baskin as the full owner of the Paia Inn.

In May, the U.S. Equal Employment Opportunity Commission filed a lawsuit against Baskin and his business in U.S. District Court in Honolulu.

The lawsuit claimed rampant sexual harassment dating back to at least 2015 and sought compensation for past and future losses for what the commission called “intentional, malicious and reckless conduct.”

Filed on May 15, the lawsuit alleged Baskin subjected “female employees, some who were teenagers, to frequent, ongoing, inappropriate, unwelcome and offensive conduct of a sexual nature.”

The lawsuit charged that Baskin required photographs of female applicants as part of the application process, discussed his sexual activities with female employees and paraded them around the hotel to impress male friends who patronized the hotel and restaurant.

According to the lawsuit, Baskin also demanded that female employees whose jobs did not include providing massages give him massages while he was naked. The commission further alleged Baskin propositioned female employees for sexual acts and required them to model bikinis for him.

Through a representative, Baskin has previously denied any wrongdoing related to the lawsuit.

“We are confident that the truth will fully clear Mr. Baskin’s name, and we look forward to sharing more details when we are able,” the representative said in May.

Baskin did not return a message left for him at the Paia Inn on Saturday.

In addition to the Paia Inn, Seashore Properties LLC and Paia Life LLC, which are both owned by Baskin, also filed bankruptcy paperwork on Friday.

In the Chapter 11 filing for Seashore Properties, the business claims $10 million to $50 million in both estimated liabilities and assets.

Editor’s note: This report has been updated with additional information about more bankruptcy filings for other companies also owned by Michael Baskin.

Starting at $4.62/week.

Subscribe Today