More than two months after receiving a state cease-and-desist order, Maui Industrial Loan & Finance Co. has filed for bankruptcy and stands to lose its license as a lending institution.

The state will determine this week whether the Wailuku-based firm will continue to be a licensed nondepository financial services loan company.

In November the state's commissioner of financial institutions, Nick Griffin, hit the firm with an order to stop holding, soliciting or receiving any money or deposits from customers.

The matter has since been referred to the state attorney general's office, said Griffin.

The attorney general's office withheld comment yesterday.

Last week's filing seeks liquidation under Chapter 7 bankruptcy relief. The company's liabilities are about $16.2 million, $15.5 million of which is owed to about 60 unsecured creditors. The firm's assets are at $7 million, according to the filing.

Most of the creditors are Maui-based individuals and businesses. The promissory notes range from $2 million to a trust in Honolulu, down to a $5,000 note to a Wailuku-area corporation.

The only secured creditor listed is American Savings Bank, which is owed $723,480.

Griffin said there was never any indication of deposits in the company's periodic financial reports to the state. That's because the state Division of Financial Institution's oversight primarily concerns compliance when nondepository companies make loans, not when they take deposits.

As a nondepository loan company, Maui Industrial was not allowed to take deposits. Most of the money it would put out as loans would come from the owner's initial capital, as well as borrowed money from other financial institutions.

“;What happened was we had called them (Maui Industrial officials) about something else that was on their balance sheet,”; Griffin said. “;In answering that, they started to give us more information than we asked for. Upon review there was a second set of books that the principal was keeping that arguably had nothing to do with their regulated entity.”;

Griffin declined further comment on the details due to the continuing investigation. There was no answer at Maui Industrial's office yesterday.

According to a report from the Maui News, the firm's president, certified public account Lloyd Kimura, is facing lawsuits regarding unpaid loans and foreclosures. He is also accused of mismanagement by buyers of a commercial condominium in Wailuku Industrial Park.