The owner of the stalled Landmark Hotel project in Charlottesville has filed for Chapter 11 bankruptcy as a result of several legal battles.
Minor Family Hotels said the project has been involved in eight lawsuits over the past 18 months with the project’s former developer, general contractor and financial backer.Halsey Minor, CEO of Minor Family Hotels, said he the bankruptcy filing will put all court disputes into the U.S. Bankruptcy Court for the Western District of Virginia in Lynchburg, speeding resolution.
“After 18 months and significant costs, the company is no closer to resolving the litigation surrounding this project,” Halsey Minor, CEO of Minor Family Hotels, said in a statement. “It is unfortunate that our lenders and the [Federal Deposit Insurance Corp.] have forced us to take this step. However, the Chapter 11 process provides us with the most expeditious manner in which to resolve the litigation that has effectively shut down the project and put people out of work.”
In early 2009, Minor sued Charlottesville Hotels LLC, the developer of the Landmark Hotel, and lender Specialty Finance Group for hiding the true cost of the project and on various accusations of fraud. The project stalled, according to the lawsuit, when the developer asked for millions more than was included in the original contract. Specialty Finance Group’s parent company was taken over by the Federal Deposit Insurance Corp., which has continued to fight Minor’s lawsuit.
Earlier this week, a judge confirmed an arbitration decision that awarded Minor Family Hotels $4.2 million in damages and $2.2 million in attorneys’ fees from Hotel Charlottesville LLC. The arbitrator said that Hotel Charlottesville had distorted the true cost of the project. Earlier this year, a Charlottesville Circuit Court ordered the companies into arbitration on complaints that were not related to the terminated contract.
The stalled project has left an 11-story, unfinished building overlooking the downtown mall. Minor said the bankruptcy filing does not mean the end of the project, which was to become a 100-room boutique hotel.
What a shame. Don’t know the guy personally. However,I was impressed when he tried to buy Hialeah to bring it back to its former glory and glamor.When it looked like Stronach was going to sell Pimlico and Santa Anita, he was ready to through his hat into the ring. Any one who wants to help historic tracks, can’t be all bad.
--April Smith of Baltimore,Md.
Sep. 5, 2010 at 08:29 PM