Harp Group Puts Two Hotels Into Bankruptcy Protection
The Wall Street Journal reports: Hotel owner Harp Group Inc. put two of its properties -- the InterContinental Chicago O'Hare and the Radisson at Los Angeles International Airport -- into Chapter 11 bankruptcy protection after it couldn't reach compromises with lenders holding $278 million of debt on the properties.
The hotels filed for bankruptcy Monday in U.S. Bankruptcy Court in Chicago. The bankruptcies don't involve the other 10 hotels Harp owns or the 25 it manages.
The bankruptcies are the latest fallout in what is shaping up to be the worst downturn for hotels since the early 1990s. The combination of curtailed travel and high debt loads taken on during the boom years of 2004 to 2007 are squeezing hotel owners. Many now can't pay interest costs on their debt, and the value of many hotels has fallen below the balance remaining on their mortgages.
The result is a rapid rise in loan delinquencies, hotel foreclosures and owners turning over hotels to their mortgage holders. According to real estate research company Real Capital Analytics, distressed hotel debt -- including delinquent loans, foreclosures, bankruptcies and restructured loans -- now totals $16.8 billion in the U.S. That's in comparison to $1.3 billion a year ago.
View the full article on The Wall Street Journal: Harp Group Puts Two Hotels Into Bankruptcy Protection
Posted by: Matthew Stone