Honolulu nonprofit Unity House Inc., owner of the Lotus at Diamond Head Hotel, has filed for Chapter 11 bankruptcy protection.

According to an April 14 report in the Honolulu Star-Advertiser, Washington-based MK Pacific, Unity House’s largest creditor, lent Unity House $5.5 million to buy the Lotus in December 2009 for $8.5 million, but filed a foreclosure lawsuit in February after the one-year loan matured.

According to Unity House Chairman Jim Boersema, the Lotus at Diamond Head could possibly be sold in order to repay the loan.
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