A group of lenders that foreclosed on the Maui Prince Hotel yesterday asked the Maui Circuit Court to appoint a receiver to take over resort operations and keep the property open in the wake of reports of mounting losses.

"Under Maui Prince's management, the hotel has been losing what is now estimated to be over $1 million per month," said Barry Sullivan, attorney for lender Wells Fargo Bank.

On Monday, Prince Resorts Hawaii president Donn Takahashi announced his company will no longer manage the resort's hotel and golf operation as of Sept. 16 and that all 380 employees were given layoff notices.

Takahashi said the hotel is dealing with "very serious funding issues that are clearly the responsibility of the owner and lenders." He said on Monday that his company was forced to issue layoff notices because it had not received assurances that payroll and other financial obligations would be met.

Sullivan disputed that, saying the mortgage lender had been making funds available for payroll and operations at the hotel throughout August and on Monday had advanced another $247,000 to pay vendors and suppliers of the hotel.

Takahashi said his company has past due accounts payable to various suppliers and vendors of more than $1 million, which are the obligation of the owner.

Sullivan said he could not say how many of the hotel's unionized workers might be rehired by the new management company, but he expects it would be "a very substantial number." Any change in terms of the workers' labor agreement would have to be negotiated with the International Longshore and Warehouse Union, which represents the workers.

And Sullivan said several hotel operators — both inside and outside of Hawai'i — already have expressed strong interest in taking over management of the property. He said they would operate it at the three- to four-star level that the hotel has been over the years, after it stops operating under the Prince brand.

Takahashi said the hotel has been running a little more than half full.

The request for a receiver is supported by the ILWU Local 142, which represents the majority of the resort's workers, as the best way to preserve jobs and ensure operations at the 23-year-old property.

"Our main concern is to preserve Maui jobs, keep the hotel and golf course open, and continue welcoming visitors who want to come to Makena," said Willie Kennison, the ILWU Maui director.

"We hope that Maui Prince and the mortgage lender can work out their difficulties, and we appreciate both of their efforts so far," Kennison said.

The lenders filed a foreclosure complaint last week against the owner of the resort, Makena Hotel LLC. The complaint alleged that Makena Hotel LLC, which owns the Maui Prince Hotel LLC, Makena Golf LLC and other affiliated companies owning land in the Makena Resort, defaulted on its loan secured by the resort.

The hotel and golf course have been managed by Prince Resorts Hawaii.

Circuit Judge Shackley Raffeto scheduled a hearing on the receivership motion for 10:30 a.m. Tuesday.

Sullivan said Prince officials have not provided a budget or plan to reduce these losses and have "been unable or unwilling to provide the lender with an accurate projection of losses and cash needs."

But Sullivan also said the situation does not appear to be a simple casualty of a tough economy and declining numbers of visitors. "This is not a situation that would ordinarily be expected, even in a severe recession," he said.

The owner of the hotel, a venture between Everett Dowling Co. and a Morgan Stanley real estate fund, had recently invested upward of $200 million of their own money into this property. On top of that, it borrowed an additional $227 million from another tier of financiers, known as mezzanine lenders, Sullivan said.