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Paulson Group’s Maui Resort, PGA West File for Bankruptcy

The Grand Wailea Resort Hotel & Spa in Hawaii and four other luxury resorts filed for bankruptcy after lenders including Paulson & Co., one of the world’s biggest hedge funds, seized them from Morgan Stanley’s real estate funds.

The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, according to Chapter 11 papers filed today in U.S. Bankruptcy Court in Manhattan. The lending group, which consists of Paulson, Winthrop Realty Trust and Capital Trust Inc., said it will restructure the debt and keep the hotels operating to take advantage of a predicted turnaround in the luxury market.