Morgan Group Holding has filed for bankruptcy on the Ontario Airport Hotel just months after its lender attempted to push the property into receivership.
The property, located at 700 North Haven Avenue, is a 10-story, 309-key hotel that sits near Ontario International Airport and Toyota Arena. The 200,000-square-foot hotel houses a restaurant called Mr. J and has rooms renting for at least $159 per night, according to its website.
Morgan, through an entity called Starbridge (Ontario) Investment, filed for Chapter 11 bankruptcy on April 3, according to court records from California’s Central District. In its petition, the firm estimated its liabilities between $10 million and $50 million.
The Chapter 11 protection from creditors comes just months after the lender on the property, Cathay Bank, filed a lawsuit claiming that Morgan defaulted on nearly $13.6 million in debt. Cathay provided a $15 million construction loan on the hotel in 2019.
At the time, Morgan, headed by Jianhua Jin, planned to renovate the hotel and rename it the Crowne Plaza Ontario Airport, court records show.
In its complaint, Cathay claimed that the loan became due in its entirety last September. The bank also pushed the judge to appoint a receiver and issue a restraining order against Morgan.
Morgan Group’s bankruptcy is unfolding as California’s hospitality sector attains a degree of recovery. In a report published last week, commercial brokerage firm Matthews claims that “tourism is alive and well” in the state.
“Over the last 12 months, the market has seen 7,126 new rooms delivered and over $2.2 billion assets traded. Despite grappling with the aftermath of a down market, California’s hospitality sector has shown signs of resilience, and its recovery is a promising sign for investors and developers,” the report read.
On the finance front, however, conditions remain bleak for the hospitality sector. According to Trepp, the U.S. lodging CMBS delinquency rate stood at 5.46 percent in January, which is much higher than the overall delinquency rate of 4.66 percent.