Lubert-Adler Caribbean project bankrupt
Starwood moves to take over money-losing Viceroy Anguilla resort
"Viceroy Anguilla Resort & Residences of the island of Anguilla filed under Chapter 11 yesterday," reports Bloomberg here. Auction under local law and a Chapter 11 plan will be held May 24.
The spread is "owned by a partnership of Viceroy Hotels & Resorts and Lubert-Adler Real Estate Funds," reports Wall St Journal, view here. Philadelphia-based Lubert Adler, a partnership of investors Ira Lubert and Dean Adler, is a $6 billion+ property group that counts Pennsylvania pension funds among its investors. Lubert heads a group that recently won state permission to open a gambling casino at a King of Prussia hotel
Once Viceroy Anguilla is in bankruptcy proceedings, "Starwood, the resort's largest secured creditor, would then aim to take over the Viceroy, which has hosted celebrities such as Paul McCartney, Ellen DeGeneres, John Mayer and Sandra Bullock," WSJ added.
Bloomberg: "The new loan is to be provided by the existing secured lender owed $370 million. An affiliate of Starwood Capital Group LLC acquired the loan in October." Previous lender was Citigroup.
The resort filed papers late yesterday asking the bankruptcy judge in Wilmington, Delaware, to arrange an auction May 24. The auction must comply with local law in Anguilla.
"Construction began in 2005 and was intended to last two years, costing $144 million. By January 2007, the projected cost grew to $327 million...
"The project officially opened in October 2010. The owner collected deposits of $49 million on contracts for the sale of 97 units," but the owner used the money instead for operations, and some of the buyers sued to get their money back.
"The petition lists assets of $531 million and debt totaling $462 million. The 35-acre project has 166 residences with prices ranging from $600,000 to $6.5 million. Revenue in 2010 was $16.7 million, resulting in a net loss of $13.6 million."
US Bankruptcy Court, Wilmington: In re Barnes Bay Development Ltd., 11-10792