Grand Wailea Owner Files Bankruptcy After Seizure
The owner of the Grand Wailea Resort Hotel & Spa in Maui, Hawaii, and 30 other units linked to luxury hotels and golf courses sought bankruptcy protection after lenders including Paulson & Co. seized control of them from Morgan Stanley’s real estate funds.
MSR Resort Golf Course LLC, also known as PGA West & Citrus Club, listed more than $1 billion in both debts and assets in a Chapter 11 petition filed today in U.S. Bankruptcy Court in Manhattan.
The lenders that seized the resorts in a foreclosure auction held junior debt that helped finance Morgan Stanley’s 2007 purchase of CNL Hotels & Resorts Inc. for $6.7 billion. The lenders, which also included Winthrop Realty Trust and Capital Trust Inc., foreclosed when New York-based Morgan Stanley funds defaulted.
Other properties in the group are the Doral Golf Resort & Spa in Miami; JW Marriott Grande Lakes and Ritz-Carlton Grande Lakes, both in Orlando, Florida; the Claremont Resort & Spa in Berkeley, California; the La Quinta Resort & Club and adjacent PGA West golf course in La Quinta, California; and the JW Marriott Desert Ridge Resort and Arizona Biltmore Resort & Spa, both in Phoenix.
Following the seizure, the lenders still faced negotiations with trusts overseeing a securitized mortgage on the properties.
Today, $1.5 billion outstanding on senior loan pools was set to become due, according to papers filed in a dispute between CNL debtholders in state court in Delaware. Restructuring talks began Jan. 6 to avoid potential actions by CNL’s senior lenders, court papers showed.
The case is In re MSR Resort Golf Course LLC, 11-10372, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Tiffany Kary in New York at tkary@bloomberg.net.
To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.
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