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Sagamore Hotel owners file for Ch. 11 bankruptcy

October 07, 2011 03:52PM

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Sagamore Hotel
The owners of the Sagamore Hotel in Miami Beach have filed for Chapter 11 bankruptcy, the Wall Street Journal reported, even though say the hotel is profitable.

The owners, Sagamore Partners Ltd., filed for bankruptcy to protect the property from a foreclosure suit filed by special servicer LNR Partners. As previously reported, the hotel defaulted on its $31.5 million mortgage. But Sagamore Partners claimed at the time that they stopped making the payments in an effort to restructure the loan, as per LNR’s instructions.

The hotel will continue to operate during the bankruptcy procedure, the Journal said.

“The Sagamore has never been a troubled property,” Sagamore Partners said in a statement. “The owner’s goal is to reinstate the property’s mortgage, apply $3.5 million currently being held by our lender’s servicing agent, as well as approving several new revenue-generating initiatives at the property, all of which have been denied without explanation by the servicing agent.” [WSJ]