The owners of New York’s Alex Hotel and Flatotel are seeking bankruptcy protection as part of an agreement with lenders who in January won a foreclosure lawsuit for unpaid loans.
205 East 45 LLC, the owner of east midtown Manhattan- located Alex Hotel, has $123 million in outstanding liabilities with the lenders group, according to a Chapter 11 filing yesterday in U.S. Bankruptcy Court in Manhattan. EALC LLC, the owner of Flatotel in west midtown Manhattan, has $245 million in liabilities with the lenders, according to the filing.
Starting in January 2009, the owners failed to make interest payments and repay principal on the loans, according to the filing. A drop in tourism and business travel that began in 2008 led to plummeting demand for hotel accommodations and made it impossible for the owners to refinance their debt obligations, according to the filing.
The lenders, Rockpoint Group LLC, Atlas Capital Group LLC, and the Procaccianti Group, acquired the secured loans from Anglo Irish Corp. in 2010, according to the filing. The lenders sued to foreclose on the loans the same year, according to the filing.
The cases are In re 205 East 45 LLC, 12-12208, and In re EALC LLC, 12-12209, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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