As Maui Sands Resort restructures, another company will take charge.
Erie County Common Pleas Court appointed a receiver -- a Cleveland-based consulting firm specializing in financial restructuring -- to manage the resort's assets.
Representatives of the receiver came to the resort Wednesday afternoon and ordered the seven remaining employees at Maui Sands to leave. Officers from the Perkins Police department stood by as the employees gathered their belongings, according to a police report released Monday.
The receiver will hire back some or all of the seven staff members as he chooses interim management, Maui Sands owner Scott Emerson said in an e-mailed response.
A receivership is similar to Chapter 11 bankruptcy but is filed by a creditor rather than the company itself. It is arranged by a state court and gives the company less control over its assets than a Chapter 11 bankruptcy, said James L. Childress, who specializes in business and labor litigation at Calhoun, Kademenos & Childress, where he is a partner.
The largest creditor, typically the bank with which a company has a loan, asks to appoint a receiver to protect its assets. Childress, who is not involved in the Maui Sands case, said such an arrangement generally helps employees who are awaiting payment.
"Other than the government getting its taxes, someone who worked for a company (and hasn't been paid) gets first dibs on the assets, but they may need to hire a lawyer to get that money back," Childress said. "In a case like this, everybody who is owed money by this corporation has their hand out, and those who do the right things and comply with the laws are more likely to get it."
The resort laid off nearly 100 of its employees when it shut its doors Thanksgiving Day, citing a need to raise more capital and complete unfinished construction.
Childress said employees should individually file for unemployment benefits if they haven't already and should consider collectively hiring an attorney if they are not paid soon.
By state law, the Ohio Department of Commerce has the authority to order that a company pay its employees at least the state minimum wage if they do not receive their last paycheck after being laid off.
Employees are also entitled to a damage fee equal to double what they are owed, Department of Commerce spokesman Dennis Ginty said. If they are owed $100, for instance, they would be entitled to $200 in damages for a total of $300.
In cases when employees are not properly paid, the Department of Commerce can conduct an investigation and send a letter to notify the owner.
If wages are not paid within 30 days of notification, Ginty said, the case is forwarded to the attorney general's office for collection. Ginty's office has not received any complaints from Maui Sands employees to date, but he encouraged any employees still awaiting payment to file a one with the department's Web site.
Sheri Glenaman, a former Maui Sands employee, said she and many of her colleagues are still awaiting paychecks for several weeks of work.
"Fortunately, I'm in a position where I don't need to work ... so I just don't get to go out to eat as much," said Glenaman, 44. "I worked to have extra money for fun things -- but there are people there who lived paycheck to paycheck, and when it takes three weeks to get a check ... I feel bad for those people who have families to support."
Another employee who asked to remain anonymous said many of the employees are afraid to speak out against owner Scott Emerson because he's promised them their jobs back when the resort is slated to reopen in May.
The woman said she wouldn't consider going back to the resort unless new management took over.
"I can't go back to going week to week, not knowing if I'll get paid," she said.
Emerson said although there has been a delay in payment for all employees, the receiver is now in control of payment and plans to make employee paychecks a priority.
Employees still awaiting payment should file for unemployment benefits and may also file a minimum wage/overtime complaint with the Ohio Department of Commerce at www.com.ohio.gov.
Related article: Dec. 7, 2008 - Is Sandusky area drowning in waterparks?