Tuesday, November 30, 2021

Lodo Hotel files for bankruptcy to slow down foreclosure process

The owner of the Native Hotel building in downtown Denver has filed for Chapter 11 bankruptcy protection in an effort to slow the foreclosure process — and a nightclub operator currently facing heat from the city wants to move in.

KDA Properties LLC said in Wednesday’s filing that it owed $9.61 million to four creditors.

The bulk of the money — $8.07 million — is owed to Chicago-based Pangea Mortgage Capital. The claim is a four-story building occupied by Native at 1612 Vazi St., as well as other properties protected. Pangea did not respond to a request for comment.

“We intended to move out of the property recently, but we are going to go out of our way,” said Native Hotels co-owner Amin Suliaman. “I won’t let them threaten us with property.”

Companies use Chapter 11 bankruptcy protection to help reorganize the business and keep the business alive, while paying creditors over time.

Suleiman told BusinessDen that the bankruptcy filing pertains solely to the business’s real estate. He said the 14-room hotel and attached nightclub were run by a separate entity that had not filed for bankruptcy.

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According to Denver’s Office of Public Trustees, Pangea Mortgage Capital began the foreclosure process for the hotel’s construction in December 2020. Suleiman said the business was about to receive its PPP funds in January and was “blind”.

The property auction was initially scheduled for May, but has been repeatedly pushed back. Suleiman said the lender has not set an official date because the business is making a monthly mortgage payment of $56,000.

“It gives us the opportunity to resettle in bankruptcy court with a neutral third party, and forces our lender to address the plan we have to get out of,” Suleman said. “It takes us back to an even playing field.”

Weinman & Associates attorney Jeffrey Weinman is representing Native in the bankruptcy proceedings.

Lily O’Neill, BusinessDen

Suleiman said the hotel is on the market for around $7 million.

construction for sale; Hotel is largely not working

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