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StarBulletin.com

Kandoo sinking


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POSTED: Saturday, August 22, 2009

Entrepreneur Robert Maynard's Kandoo!Oahu apparently can't — for now.

The company ceased operations Monday on its 98-ton steel catamaran it calls Kandoo!Island, which moored three miles off Waikiki for ocean recreation activities and now sits idle in Honolulu Harbor.

After just two weeks in operation, Kandoo cannot pay all its employees or its insurance premiums, and laid off most of its nearly 200 employees Thursday, said acting spokesman David Butler, who oversees the computer systems for the company.

“;The (payroll) checks, much to our surprise ... were returned for insufficient funds,”; Butler said. “;Money has been coming into the account in basically trickles.”; He said most employees cashed their paychecks, while some of the bigger checks did not clear.

The company had promised in full-page ads “;great wages”; and “;awesome benefits”; for locals tired of the economic gloom. Maynard and company President Dale Smith said in June they planned to invest $7 million in the company.

Maynard has had a couple of highly successful businesses, as well as some large, high-profile failures, including a credit-repair business that caused the Federal Trade Commission to bar him for life from that type of business.

Kandoo employees were told they will all be paid for the hours they have worked, hopefully by Monday, Butler said.

“;Instead of dragging everybody along until next week, we just had to announce (the layoffs), even though we have every intention of being back in operation. We can't simply have them working nor sitting around when they could be searching for other jobs and feeding their families,”; Butler said.

“;Our hope is to be back on the water Aug. 31,”; he said.

The company, plagued with financial and other problems, put priority on paying employees over paying for insurance, Butler said, but obviously failed to do both.

“;Currently we are underfunded,”; he said. The company's funding plan included selling stock, but there were problems with that, he said.

One man told the Star-Bulletin on Thursday that his wife “;just worked her a—off for three weeks, and they won't pay them,”; but he was not aware there was a massive layoff at the company.

The woman, who declined to comment, was told of the company's insurance woes, he said. “;She loves her job but they won't pay their employees.”;

The company is also unable to pay vendors, Butler said.

Maynard, Kandoo's chief executive officer, is exhausted, working diligently the last few days, trying to pull financing together, Butler said.

The company's main boat, the Kandoo!Island, docked at Pier 19, is working fine, Butler said. The Coast Guard issued its certificate of inspection July 27, but modifications to the small passenger boat such as elevators, which go 15 feet below the boat, and a loading ramp and dock must still be approved.