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When Bad Things Happen to Good People ...

Bankruptcy May Be Your Option

Chapter 11 filing prevents foreclosure sale

When a company in Oklahoma launches a new business, it likely does so with the ambition that it will be profitable. While money is put into renovating and rebranding, there are often factors in play that a company has little control over that could potentially jeopardize the business's overall success. In fact, one out-of-state company has recently filed for Chapter 11 bankruptcy protection, a filing that narrowly prevented the foreclosure of their property.

The filing involves a company called Wayzata-Rochester 16 Hospitality Associates. In 2012, the company purchased an out-of-state hotel that was part of the America's Best Value franchise. Following the purchase, over $6 million was put into renovating the 145-room hotel, and it was rebranded as a Wyndam Garden hotel.

However, facing financial struggles, the company has been seeking a buyer to to refinance its mortgage. In order to prevent a foreclosure sale, the company filed for bankruptcy the day before the sale was scheduled. Now it is continuing its search for a buyer or a new mortgage. A recent appraisal assessed the value of the hotel at approximately $15 million. It is expected to remain open following the filing.

Companies in Oklahoma are often left facing difficult decisions regarding a business. While there are legal options that can help with unmanageable debt in a situation such as this, many may be unclear about the best course of action. Fortunately, there are attorneys with bankruptcy law experience, including Chapter 11, who can help business owners understand their options and initiate proceedings when appropriate.

Source: postbulletin.com, "Rochester hotel owner files for bankruptcy", Jeff Kiger, June 28, 2016

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