Miami Beach’s boutique Sagamore Hotel, which has hosted the Playboy Super Bowl party and celebrities like Kate Moss, took a trip to the U.S. Bankruptcy Court last week.
Sagamore Partners Ltd. said in an emailed statement that while its hotel is “profitable,” it filed for Chapter 11 protection in Miami in a bid to address difficulties with the special servicer of its mortgage. Special servicers are appointed to manage a loan when the borrower defaults.
“The Sagamore has never been a troubled property,” the statement read. “The owner’s goal is to reinstate the property’s mortgage, apply $3.5 million currently being held by our lender’s servicing agent, as well as approving several new revenue-generating initiatives at the property, all of which have been denied without explanation by the servicing agent.”
In April 2010, the Sun Sentinel reported on the hotel’s legal battle with special servicer LNR Property over its $30 million-plus mortgage. The special servicer had taken over managing the loan upon Sagamore’s default and sought to foreclose on the 93-room hotel; Sagamore fired back with its own lawsuit to stop the foreclosure, saying it had the money to keep up with its obligations. A bankruptcy filing automatically halts all pending litigation and buys the hotel some breathing room.
Sagamore Partners said it believes LNR is still the special servicer on the mortgage.
Owner Martin Taplin said the hotel, which will continue operating in Chapter 11, is ready to carry out agreements with “highly respected food and beverage organizations” that would generate substantial revenues, but he said the special servicer has “constantly denied” the agreements.
“To be denied these agreements by extremely reputable organizations is counter to our interests as well as the lenders’ and creditors’” interests, Taplin said in the statement. “We are confident that through the bankruptcy process all issues with our lender and creditors will be resolved favorably for all involved.”
The Sagamore has starred in the pages of magazines for the stars it attracts, like Moss and whatever Puff Daddy is calling himself these days. And it hosted Playboy’s annual Super Bowl party in 2010. Held the night before the New Orleans Saints won football’s big game at the Miami Dolphins’ home stadium, the bash featured Fergie of the Black Eyed Peas as well as Playboy Playmates and Playboy Club Bunnies.
The boutique hotel, which also goes by the name Art Hotel, says there “is art everywhere you turn” at the Oceanside property. It incorporates quotes from artists in its décor as well as Taplin’s contemporary art collection, murals, videos, and installations.
While LNR Property doesn’t comment on the specifics of any case in litigation, it did provide this emailed statement:
“Generally speaking, LNR Partners serves as the agent of a securitization trust when a borrower is unable to live up to the terms of its loan, including its scheduled payments,” said David Levin, vice chairman of investor relations for LNR Property. “Our obligation is to protect the interests of the bondholders of the trust which include public and private pension funds, individuals and institutional investors.”
Source: The Wall Street Journal