Madison 92nd Street Associates Seeks Bankruptcy Protection
Madison 92nd Street Associates LLC, the owner of the Upper East Side Courtyard by Marriott in Manhattan, sought bankruptcy protection to avoid a foreclosure sale and pursue mortgage refinancing, according to a court filing.
The corporation listed assets of as much as $500 million and debt of as much as $100 million, according to the filing today in U.S. Bankruptcy Court in Manhattan. The company owns the 226-room hotel on East 92nd Street that opened in 2006 and has been managed by Courtyard Management Corp., a unit of Marriott International Inc., according to the filing.
The New York State Department of Taxation and Finance holds the largest unsecured claim of $679,581, court papers show. Lender General Electric Capital Corp., owed $74 million, has scheduled a foreclosure sale for Aug. 24. The company’s majority equity holders are working with Westport Capital Partners LLC to line up refinancing, according to the filing.
Mismanagement, high labor costs and the economic slowdown have contributed to an erosion in net operating income and caused the company to become delinquent on its mortgage and subject to foreclosure proceedings, according to the filing.
The company has a pending lawsuit against Marriott alleging fraud and will seek to end the existing management agreement with Courtyard, according to the filing. A call to Marriott’s media line after regular business hours wasn’t immediately returned.
The case is In re Madison 92 Street Associates LLC, 11- 13917, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net
To contact the editor responsible for this story: Andrew Dunn at adunn8@bloomberg.net
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