Clockwise from top left: Simon Elias, Alex Hotel, Flatotel and Izak Senbahar
The Alexico Group will likely lose control of a pair of Midtown hotel properties by the end of the year, after a New York State Supreme Court Judge ruled that the debtholders on the Flatotel and Alex Hotel may foreclose on the properties, according to the Wall Street Journal.
The Flatotel is a 272-room hotel the Alexico Group developed at 135 West 52nd Street that the debtholders moved to foreclose on in September 2010 with a $197 million lawsuit. The Alex Hotel, a 205-room property at 205 East 45th Street, was first hit with an $81.7 million lawsuit two months earlier, The Real Deal reported at the time.
The debt on the hotels is owned by a partnership of Rockpoint Group, Atlas Capital Group and Procaccianti Group, which purchased it at a discount from Anglo Irish Bank in July 2010. The Alexico Group, led by Simon Elias and Izak Senbahar, also owes more than $25 million in personal guarantees, the Journal said, bringing the total debt past $300 million.
Alexico first defaulted on the loans in 2009, but managed to delay turning over the property to creditors by arguing that its reallocation of money to another property it owns, the Mark Hotel, was permissible under an oral agreement with Anglo Irish. The judge rejected the argument, and has now cleared the path for the partnership to foreclose on the properties. [WSJ]
