Time Hotel Nears Deadline for Submission of Reorganization Plans
Feb. 21, 2019
The Time Hotel opened in Nyack in May 2016. The owners saw the property as a boutique hotel that would attract urban tourists and business travelers, but the plan has not succeeded. Several of the Hotel’s investors filed an involuntary bankruptcy petition against the Hotel in July 2018 (This blog took note of the filing on July 26, 2018). The business bankruptcy has not been resolved, and the trustee set Friday, February 15, 2019 as the deadline for interested parties to file proposals for resolving the bankruptcy.
The bankruptcy process has been complicated by allegations of fraud and mismanagement on the part of the hotel’s managers. Also, many investors have sued each other in the hope of keeping the hotel open and preserving a portion of their investments. The original group of investors is forming a new entity in the hope of being able to purchase the hotel from the bankruptcy estate. A number of other parties are expected to put in bids. Some bids will propose liquidation of the hotel, while others will propose a restructuring of debt and the continued operation of the hotel. Dream Hotel Group, the hotel’s original management firm, is expected to put in a bid.
The trustee said 72 parties have executed confidentiality agreements so that they could review the hotel’s financial statements. Eighteen entities are conducting due diligence investigations and 8 groups have toured the property. At this point, the fate of the hotel is up in the air. The successful bidder will face the necessity of settling up to $45 million in debt, including $362,200 in real property taxes. Unsecured creditors have also filed a number of claims for goods and services.
The trustee has set February 27, 2019 for an auction of the hotel’s assets if none of the bids proves workable. That date may be changed.