July 19 (Bloomberg) -- Hampshire Hotels & Resorts LLC and its partners defaulted on $55 million in debt backed by The Time, according to a lawsuit filed by LNR Partners, which is seeking to foreclose on the hotel near New York’s Times Square.
Hampshire Hotels, the management arm of Chatwal Hotels & Resorts, and Liechtenstein-based Marko Trust have missed payments of $619,511 due each month since Jan. 11, according to the complaint, filed by Miami-based LNR in New York State Supreme Court on July 13. LNR, which owns the loan, asked the court to appoint a receiver, trustee or liquidator for the property.
The loan is backed by the 192-room boutique hotel, located at 224 West 49th St. Overnight rates at the property started at $153 this week, according to the Time website. The borrowers first defaulted on the debt in November 2009, then reached a forbearance agreement that lasted until November 2011, according to the complaint. LNR has held the loan since May.
The complaint was reported on the Real Deal’s website earlier today. The Time has faced cost pressures after becoming unionized and because of competition from such rivals as the W New York Times Square, Jay Stein, Hampshire’s chief operating officer, told the Real Deal.
Stein didn’t immediately return a telephone call from Bloomberg today seeking comment on the complaint. Bud Perrone, a spokesman for LNR with Rubenstein Communications Inc., declined to comment on the complaint.
The case is LBUBS 2006-C3 Lodging 224 LLC v. Consultant Hotel Associates, 850063/2012, New York state Supreme Court (Manhattan).
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