The suit, filed late Wednesday in state Circuit Court, claims that Tatibouet defaulted on an $8.4 million loan he took out to raise cash and refinance other loans related to the 80-room boutique hotel.

Tatibouet said the suit involves a "small misunderstanding" that he anticipates can be resolved quickly with his lenders, Owens Mortgage Investment Fund of California and Nevada firms Vestin Mortgage Inc. and Vestin Fund I LLC.

Tatibouet, who listed the hotel for sale two years ago, also said he continues to have discussions with a prospective buyer and said he is close to selling the property, though the foreclosure action could complicate the sale effort.

According to the suit, Tatibouet in April 2002 took out a 1-year loan for $8.4 million. The loan, secured by the hotel, matured on April 6, though there was a 1-year extension option.

Tatibouet said he did not wish to characterize the disagreement.

Troy Fukuhara, a local attorney representing the lenders, said he was not at liberty to comment on the suit.

The Waikiki Beachside was the first hotel to bear the Aston name established 17 years ago by Tatibouet, who founded Aston Hotels & Resorts but was fired as its president last year after a fight over licensing rights for the company, which Memphis, Tenn.-based ResortQuest International Inc. bought in 1998.

The 12-story hotel, opposite Kuhio Beach and between the Hyatt Regency Waikiki and the Waikiki Beach Marriott Resort, was redeveloped more than 20 years ago by Tatibouet.

Tatibouet also owns another Waikiki hotel at the center of a legal dispute. In that case, Tatibouet last month started selling his leasehold interest in the Aston Coral Reef Hotel's 247 units to individual buyers as part of a plan to convert the property into a resort condominium.

Landowner The Queen Emma Foundation objected to the conversion and sued to block the deal. Tatibouet said discussions to resolve that matter are progressing.