125-year-old tourist hotel files for Chapter 11 bankruptcy

Over the last year, several hotels have seen their financial problems reach a point where they had to file for bankruptcy.

In September 2025, the company behind hotels such as the Tuscany and Hotel 27 in New York City suddenly filed for Chapter 11 bankruptcy and shut down operations. Guests with booked stays arrived to find that no staff were there to check them in. Customers had to find places to spend the night in Manhattan at last-minute prices.

A month earlier, the developer and owner of the iconic Oheka Castle — the Long Island property built to look like a French château and now listed among the Historic Hotels of America — filed for Chapter 11 protection amid debts of over $60 million. The castle, which is also commonly booked for film sets and photoshoots, is still operating as usual and accepting reservations.

Amid string of problems, Maui hotel Pa'ia Inn files for Chapter 11 bankruptcy

An entire country away from New York in Hawaii, the owner of the Pa'ia Inn hotel in Maui has filed for Chapter 11 bankruptcy in the United States Bankruptcy Court
District of Hawaii in Honolulu.

In the filing, the company is registered in Pa'ia on the north shore of the island, along the famous "Road To Hana" that runs through the rainforest to remote beaches on the eastern end of the state. Honolulu-based bankruptcy attorney Allison A. Ito is listed as representing Pa'ia Inn in the proceedings.

Related: Another regional airline files for Chapter 11 bankruptcy

Earlier this year, a lawsuit filed in May 2025 by the U.S. Equal Employment Opportunity Commission alleged that owner Michael Baskin sexually harassed a number of female inn employees.

The lawsuit states that Baskin had "regularly preyed on a class of female employees, including some teenagers, and subjected them to sexual harassment" since at least 2015.

"The harassment included repeated, frequent and offensive touching, along with sexual advances and comments," the announcement about the lawsuit filed in the U.S. District Court for the District of Hawaii on May 15 states further.

Paia Inn Chapter 11 Bankruptcy

• Filing Date: October 24, 2025
• Court: U.S. Bankruptcy Court for the District of Hawaii
• Case Number: 1:25-bk-00956
• Debtor Entities: Paia Inn LLC, Paia Park LLC, Paia Life LLC, Seashore Properties LLC
• Assets: Less than $50,000
• Liabilities: Up to $10 million
• Major Debts: $2.7 million to Moby Capital; $2 million to the SBA; additional debts to Hawaiian Telcom and Central Maui Propane
  Source: PacerMonitor

Amid sexual harassment lawsuit, Maui hotel's bookings plummet

On the same day, a number of former employees held a rally in front of the hotel to share their experiences.

While the case waits to be heard in court, the attention around the accusations likely led to a dropoff in bookings and ultimately bankruptcy.

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Since the lawsuit was filed, Baskin has not commented to news outlets about the accusations that in some cases were publicly reported in 2019. Prior to them coming to light, reviews of the hotel described it as an "independently-owned inn" that "fits beautifully into a laid-back, bohemian little town on Maui's North Shore."

"The owner of a company sets the tone for the entire workforce, and by openly harassing employees in front of other staff and patrons he created a hostile workplace," Laura Ishida, acting director for the EEOC’s Honolulu Local Office, said in an additional statement on the lawsuit.

"Retaliation against those who are brave enough to stand up for themselves and others also sends a chilling message to anyone else in the workplace."

EEOC Lawsuit for Sexual Harassment

• Filed: May 15, 2025
• Defendant: Michael S. Baskin, owner of Paia Inn
• Allegations: Sexual harassment of young female employees since at least 2015, including inappropriate touching, sexual advances, and retaliation against those who complained
• Legal Basis: Violations of Title VII of the Civil Rights Act of 1964
  Source: GovDelivery

Pa'ia Inn history

• 1920s: The original building was constructed in the 1920s, serving as a residence for Japanese plantation workers during Maui's sugar plantation era.
• 2008: Michael Baskin acquired the property and initiated a comprehensive renovation, transforming it into a boutique hotel.
• 2009: The newly renovated Pa'ia Inn opened its doors to guests, offering a blend of luxury and local authenticity in the heart of Maui's North Shore.
• 2018: Plans for expansion were proposed, including converting office space and a spa into additional rental rooms. However, these plans faced opposition from local residents concerned about increased traffic and changes to the town's character.
• 2022: The Pa'ia Inn was listed for sale, highlighting its status as a historic boutique hotel with modern appeal.
  Source: Sakamoto Properties
• 2025: Pa'ia Inn continues to operate as a popular destination for travelers seeking a unique and intimate experience on Maui's North Shore.
• October, 2025: The historic hotel files for Chapter 11 bankruptcy.

Related: Low-cost airline to pull all Hawaii flights amid low demand