Shuttered Snappers seeks protection from creditors

A more than 25-year-old Waikiki sports bar that had been trying to deal with disruptive sewer and storm drain flooding along with a federal sexual harassment lawsuit has filed for bankruptcy after closing two weeks ago.

Snappers Sports Bar and Grill, which shut down with affiliate Snap-ette Beach and Liquor Store at Discovery Bay Center, filed Chapter 7 bankruptcy liquidation papers Monday under parent company Pacific Fun Enterprises LLC.

Co-owner Mike Wenzel said Snappers, which is below ground level with an entrance off Ala Moana Boulevard, had struggled for more than two years with broken sewage and storm drains that flooded the business.

“Regretfully, we could no longer sustain our business at this location,” he said in an email.

Revenue for Pacific Fun had declined to $1.6 million last year from $1.9 million in 2015, according to the bankruptcy filing. In a little over 10 months this year, revenue totaled $1.06 million.

The Chapter 7 filing will involve a court-appointed trustee accounting for and liquidating all company assets for the benefit of creditors. However, it’s hard to predict whether there will be significant proceeds to distribute.

Pacific Fun listed assets totaling $294,237, but $200,000 of that is a pending legal claim surrounding the plumbing issue. Pacific Fun sued the owners of the retail center at Discovery Bay along with the association of apartment owners for the residential tower complex, commercial real estate brokerage firm Colliers International and Alakai Mechanical Corp. in September 2016.

Another $24,436 of the Pacific Fun assets is a security deposit for the commercial space lease. The asset balance, about $69,000, is mainly furniture, fixtures and equipment to be sold by the trustee.

Debts of Pacific Fun total $896,289. However, $816,000 of that amount is what is owed on the lease. Under federal bankruptcy law, the landlord could be limited as to how much it can recover under the lease. The next-biggest creditor is Colliers with a $32,835 claim.

Not listed among debts is an unspecified claim for damages sought by the U.S. Equal Employment Opportunity Commission in a lawsuit filed against the company in September after multiple former Snappers employees complained about sexual harassment.

The lawsuit alleges that Wenzel, along with Snappers managers and customers, “subjected female employees to repeated sexual harassment” that included making unwelcome sexual comments, unwanted touching, demanding sexual intercourse and asking employees to play with sex toys together.

The EEOC lawsuit seeks back pay, benefits and other damages on behalf of former employees. A representative of the commission could not be reached for comment Tuesday to say how the bankruptcy might affect the case.

In terms of liquidating assets for the benefit of creditors, it will be up to Elizabeth Kane, a bankruptcy trustee appointed in Snappers’ Chapter 7 case, whether to keep pursuing Pacific Fun’s lawsuit against its landlord and other parties surrounding the sewage and stormwater flooding.

Snappers was established in 1989 and went through multiple owners and name changes. Eight years ago Wenzel and his wife, Colleen, bought the business and resurrected the original name. The couple from Wisconsin promoted their venue partly as a base for University of Wisconsin-­Madison and Green Bay Packers football fans. The company also aimed to maintain a friendly Midwestern attitude and treat its staff as family, according to its website.

Waikiki resident Tom Sebas said he was dismayed and surprised that Snappers was boarded up two Sundays ago when he went there to watch football. “That bar was packed all the time,” he said. “They didn’t even have a sign saying that they closed.”