Hotels & Resorts
Lenders Want to Sell Resorts, Sever Hilton Management Contracts
Investors that seized a group of notable luxury resorts out of foreclosure last year have plans to sell some if not all of the properties and want to remove Hilton Worldwide as manager of those being operated under the Waldorf-Astoria brand. A group led by New York hedge fund Paulson & Co. took control of the Arizona Biltmore in Phoenix; The Claremont Hotel Club & Spa in Berkeley, Calif.; Doral Golf Resort & Spa in Miami; Grand Wailea Resort on Maui, Hawaii; and La Quinta Resort & Club in California in February 2011 and placed the hotels in bankruptcy. According to court filings, the lending group’s plans to bring the hotels out of bankruptcy include selling the Phoenix and Berkeley properties. Donald Trump’s development company already has approval to buy the Miami property. As for the Maui and La Quinta properties, the lending group is considering whether to sell them as well or to retain ownership and restructure their debt.
Hilton currently manages the Arizona Biltmore, La Quinta and Grand Wailea resorts, but Paulson wants to sever those contracts. Hilton, however, has made it clear that it would seek hundreds of millions of dollars in damages if the investors pursue that course. The Claremont’s operator, Pyramid Resort Asset Management LLC, is also in danger of losing that property, as the lending group is marketing the hotel without a management contract. businessweek.com