The developers of the Cooper Square Hotel have handed the property over to mezzanine lender Westport Capital Partners as part of an “amicable” loan restructuring deal reached late last year, managing partner Klaus Ortlieb said.

The striking, 21-story East Village hotel, which was built around an old tenement building at 27 Cooper Square, debuted in late 2008 after years of delays. But it wasn’t long before the owners ran into financial trouble, and the following December, commercial lender WestLB filed to foreclose on $52 million in loans backed by the 145-room hotel. Restructuring talks had been ongoing since then.

Late last year, rumors had surfaced that the owners of the Soho Grand and Tribeca Grand hotels were “very close” to purchasing the Cooper Square Hotel outright, but were later squelched by Ortlieb and his team, who released a statement at the time asserting that the hotel would not be purchased by an outside party. [more]

A German bank claims the developers of the year-old, sleek, 21-story Cooper Square Hotel in the East Village are in default on $52 million in loans, at the same time the building owes millions to contractors.

Not only is the project in financial distress, but developers and investors in the 145-room hotel at 25 Cooper Square at East 5th Street could owe as much as $6 million in personal guarantees, the recent lawsuit says.

Commercial lender WestLB filed to foreclose on $52 million in loans given to Cooper Square Hotel, Cooper Square Mezz Lender and seven individuals including the hotel’s co-developer Matthew Moss and real estate investor Kyle Ransford, a lawsuit filed Dec. 14 in New York State Supreme Court says.

In addition, at least 20 contractors have filed mechanic’s liens totaling $9.9 million on the project between June 2009 and Dec. 18, records from the New York County Clerk show. The largest single lien, for $5.8 million, was filed by contractor F.J. Sciame Construction on Aug. 21, the records show.

Moss, Ransford and investor Gregory Peck are in default on a completion guarantee, and collectively owe up to $6 million, in part because of the unpaid liens, the suit says. [more]