Aloft Miami-Brickell owner emerges from bankruptcy
The owner of Aloft Miami-Brickell emerged from Virginia bankruptcy laws after resolving a payment dispute with a New York-based lender over a $17 million loan.
U.S. Bankruptcy Judge Robert Mark on Wednesday upheld a Chapter 11 reorganization plan for Mary Brickell Village Hotel LLC, the company run by Miami developer Pedro Villar that owns the 160-key property at 1001 Southwest Second Avenue. The plan includes a settlement agreement requiring Villar’s entity to make a one-time lump sum payment of $2.5 million to a subsidiary of New York-based Torchlight Investors.
In exchange, the Torchlight subsidiary will reinstate a $17 million loan that the lender foreclosed in March last year. In a statement attached to his company’s July 2021 Chapter 11 petition, Villar alleged that Torchlight “had no sincere interest in negotiating in good faith and decided early in the process that they wanted to take the hotel.” .
Torchlight executives and the firm’s Miami attorneys, David Gay and Merrick Gross, did not respond to phone and email messages seeking comment.
Aloft Miami-Brickell’s attorney Joe Pack told The Real Deal that the hotel has remained profitable through most of the pandemic and generated cash flow to cover its debt service. However, Torchlight forced its client to file for bankruptcy protection after the lender refused to resolve its claims for default interest, special service charges and legal fees which Villar’s company disputed, it said. he declares.
In seeking Chapter 11 bankruptcy, the owner of Aloft Miami-Brickell forced Torchlight to the negotiating table, Pack said.
“This was a solvent, cash flow hotel that was using Chapter 11 as a sword against a grabbing lender,” Pack said. “All commercial real estate borrowers need to understand this is an option to protect themselves from aggressive lenders during the pandemic.”
In its foreclosure lawsuit filed in Miami-Dade Circuit Court, the Torchlight subsidiary alleged that the owner of Aloft Miami-Brickell had not made monthly payments since April 2020. The loan was taken out in 2014 .
In his statement to the bankruptcy court, Villar said Aloft Miami-Brickell suffered an initial economic hit when hotels were forced to close in the early months of the pandemic. But the loan was backed by hundreds of thousands of dollars in reserves “when Covid-19 arrived in March 2020,” Villar’s statement said.
Villar said he wanted to work out a contingency plan with Wells Fargo, which was handling the loan, in case his company misses payments. He then discovered that the Torchlight subsidiary had taken over servicing the loan and that the new lender would not help the hotel-owning entity make changes, Villar wrote.
Villar, chairman of Miami-based Sunview Companies, completed the 14-story Aloft Miami-Brickell in 2013. He bought the development site for $11.6 million in 2010, records show. The bankruptcy petition says the hotel has $34 million in assets and $18 million in liabilities.
The owner of the Holiday Inn Port of Miami-Downtown also filed for Chapter 11 bankruptcy last year due to economic hardship from the pandemic. 340 Biscayne Owner LLC’s case is still pending.