Buyer of Troubled Gold Coast Hotel Allegedly Duped Competitor

A jilted investor claims a $13.2 million Gold Coast hotel purchase ended up as a game of musical chairs — leaving him without a seat when his would-be partners allegedly pulled it out from under him at the last second.

Garnet Hotels LLC, a venture led by Florida-based investor Piyush Viradia, who’s also known as Peter Patel, filed a 10-count lawsuit in Cook County Circuit Court this month alleging that Elk Grove Village-based Avasa Hospitality and its principal, Jaimin Shah, orchestrated a “fraudulent scheme” to squeeze Viradia out of the acquisition of the Tremont Hotel at 100 East Chestnut Street in Chicago.

Sanjeev Misra, whose Chicago-based firm Paramount Capital Advisors helped arrange the hotel sale, and investor Vijay Patel are also named as defendants in Viradia’s suit.

When Shah spotted Viradia touring the Tremont Hotel property, his presence in Chicago allegedly set off alarm bells for Shah’s Avasa, which was in the process of bidding on the hotel, the suit claims. Shah purportedly took a photo of Viradia, and sent it to Misra.

Viradia claims Misra later admitted he and Shah were “afraid they would lose the property to [Viradia] due to [Viradia] being the bigger fish,” the lawsuit says. (Viradia is also listed as a manager for the LLC that owns the 174-key Holiday Inn Express at 640 North Wabash Avenue in Chicago, a property he bought out of financial distress in 2024 for $16.4 million.)

The complaint over the Tremont paints a picture of a partnership gone south, just as a deal was crossing the finish line. Viradia claims he was poised to buy the property individually in December. He had already received wire instructions from the seller, LaSalle Investment Management, which had previously provided a nearly $20 million loan on the property that ended in foreclosure, with the debt balance swelling to $25 million as the litigation began.

Viradia on his own was prepared to pay about $13.2 million to resolve the financial trouble, the same price that the property ultimately fetched from Shah’s group, according to Viriadia’s lawyer.

That’s when Shah and his associates allegedly stepped in, pitching to Viradia a structure of equal partners in the ownership to acquire the Tremont together, according to the lawsuit.

Viradia says he took the bait, pausing his individual bid in reliance on the partnership. Instead, the suit claims the defendants secretly formed Le Casablanca Hotel LLC to swoop in and close the deal by themselves in January. The new ownership venture then turned around and secured $17 million in financing for the property from Millennium Bank to close the deal, with plans to invest the additional debt proceeds beyond the purchase price into renovations, according to public records.

The deal allegedly stripped the equity Viradia says he was promised for his Garnet Hotels entity.

“My client thought he could trust them,” said Solomon Radner, an attorney for Garnet. “It’s plausible the ultimate purchasers were afraid of getting into a bidding war. They got a great deal on this property.”

Misra said he expects to be dismissed from the suit because he isn’t a part of the Tremont’s ownership and only served in a brokerage capacity on the property’s sale. Avasa didn’t return requests for comment, and attempts to reach fellow defendant Vijay Patel were unsuccessful.

According to the suit, Shah repeatedly reassured Viradia that the Elk Grove Village firm had nothing to do with the deal to buy the property, even as Avasa CFO Jayur Patel appears in state business records as a manager for Tremont’s new ownership entity.

The litigation is the latest chapter in the turbulent saga of the 122-key hotel, formerly operated by shuttered former hostel brand Selina. The property has been a lightning rod for legal disputes since 2023, when LaSalle filed a $25.2 million foreclosure suit against the previous owner, Indianapolis-based Hotel Capital, led by Michael Collier. During the ensuing legal battle, the hotel pivoted from posh lodging right off the Magnificent Mile to a temporary city-run homeless shelter — a move that drew the ire of local Alderman Brendan Reilly and laid-off union workers.

Collier steered the property’s ownership entity into Chapter 11 bankruptcy in mid-2024, but it wasn’t enough to save the deal from foreclosure. The $13.2 million sale to Avasa earlier this year represented a nearly 50 percent haircut from the property’s previous debt load.

Viradia’s suit, which includes allegations of fraudulent inducement and civil conspiracy, seeks a constructive trust over the property and “specific performance” to force the defendants to hand over Viradia’s alleged ownership stake.

The suit is set for an initial hearing on May 18 before Cook County Circuit Judge William B. Sullivan, according to court records.