A unit of Istithmar, the overseas investment arm of Dubai World, on Thursday asked the courts to intervene after last week's bankruptcy filing by the owners of the W Union Square Hotel, according to a report by Reuters.
Union Square Real Holding Corp (USRHC) said that the bankrupt lender/hotel owner group threatened to file a voluntary bankruptcy petition for the W Hotel as well but that it did not have the authority to do so.
Hotels Union Square Mezz 1 filed for bankruptcy protection on March 23 and the move stopped a foreclosure auction for the hotel.
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In the filing, USRHC said that it disagreed Hotels Union Square Mezz 1 had the authority to file a bankruptcy petition for the hotel and said that even if it did, the move would not follow bankruptcy code regulations and would be in bad faith.
Such a move would damage the W Hotel's business and its ability to meet loan payments, which would in turn damage USHRC's interest in the US $37 million Mezz 2 Loan, it added.
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Apr 5, 2010
It is quite shocking to know that owners of W Union Square Hotel has presented it for bankruptcy but what are the factors behind this bankruptcy, as apparently I don?t feel so that hotel industry is sinking so badly.