U.S. Bank National Association Sues Nesbitt for Loan Default
US Bancorp (USB)’s U.S. Bank National Association sued a group of Nesbitt companies that own eight Embassy Hotels in the U.S. over claims they defaulted on a $187.5 million loan.
The loan, made by Greenwich Capital Financial Products to Nesbitt in 2006, was assigned to U.S. Bank in January 2011 and was in default by February, according to a complaint filed today in federal court in New York. Nesbitt owes $175 million in principal plus interest, the plaintiffs said.
“Each of the eight hotels are being required by the franchisor to undergo improvements for which defendants lack the adequate funds to undertake,” the complaint states.
The hotels are in Bellevue, Washington; Blue Ash, Ohio; Colorado Springs, Colorado; Denver; Livonia, Michigan; Lynwood, Washington; Tigard, Oregon, and El Paso, Texas.
U.S. Bank asked the court to appoint a receiver to take possession of the hotels. The Nesbitt companies are accused of breach of contract.
Windsor Management Services, led by Patrick Nesbitt, is the owner of the Embassy Suite Hotels named in the suit, according to Windsor’s website. Bill Upshaw, Windsor’s chief operating officer, didn’t immediately return a call seeking comment on the suit.
The case is U.S. Bank National Association v. Nesbitt Bellevue Property LLC, 12-0423, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Don Jeffrey in New York at email@example.com.
To contact the editor responsible for this story: Michael Hytha in San Francisco at ‘ mhytha @bloomberg.net