The Kapolei-based startup school is facing a state lawsuit alleging it falsely assured students it would obtain accreditation and wrongly took over $6 million in tuition from some 240 students.

The school's lawyers have started negotiating with the state to settle the lawsuit and reimburse the students. The school issued a statement yesterday saying it was shutting down after a the court froze its assets and the assets of the school's founders, David Munro and Denise Criswell, until it rules on the lawsuit.

Circuit Court Judge Sabrina McKenna said all current employees, except the school's dean, should be paid tomorrow for work they did through earlier this week.

"I realize there are other persons involved who probably have families to support, bills to pay, mortgages to pay, mouths to feed," McKenna said.

To ensure the newly jobless workers are eligible for unemployment insurance, McKenna ordered the school's lawyers to provide them with letters saying they were being let go because the school lacked the funds to pay them.

The state's Office of Consumer Protection alleges the school gave students the impression that its accreditation was a mere formality. It also accused the school of falsely telling students there would only be 120 people in the college's first class when in fact twice that number enrolled.

The next hearing for the case was scheduled for Aug. 25.

Vireak Chea, who moved to Hawaii from California to attend the school, said he hoped he would somehow get credit for the classes he took here when he enrolls in another pharmacy school.

"In terms of trying to get the money back, that's one thing. If we could get the money back that'd be great," Chea said. "But it's our whole year here and whether it's going to be wasted or not."