Lenders sue Royal Palm hotel owners

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A fund controlled by investment management firm Blackrock has sued Guy Mitchell, majority owner of the Royal Palm hotel in South Beach that is in a stalled conversion to hotel-condo units. The suit alleges that Mitchell and his partners are overdue on loans borrowed to purchase the hotel for $128 million in 2005, and claims the mismanaged hotel is losing as much as $12 million per year. Amidst ongoing legal dispute, Mitchell has put the hotel up for sale for $220 million, according to sources.

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