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Johnstown Comfort Suites files for bankruptcy after foreclosure notice

JOHNSTOWN — The Comfort Inn and Suites in Johnstown has filed for Chapter 11 bankruptcy, a month after its creditors issued a $6.4 million foreclosure demand. The hotel, a subsidiary of Fort Collins-based hotel developer and operator Spirit Hospitality LLC, declared assets of $14.17 million and liabilities of $10.27 million, according to documents filed to the Bankruptcy Court of Colorado. Spirit claims the hotel had gross revenues of just less than $1.2 million so far in 2020, compared to just more than $2.76 million in 2018 and 2019 each. Businesses in Chapter 11 bankruptcy are attempting to reorganize debts while continuing to operate, with the goal of emerging as a healthier company. That’s in contrast to a Chapter 7 bankruptcy, where the business is liquidated and the proceeds are split between creditors. The hotel was given a foreclosure notice from its creditor FirstBank exactly a month ago for being behind on a $6.72 million loan with 5.1% interest in 2016. Wells Fargo & Co. (NYSE: WFC) is listed as a second mortgage holder within the bankruptcy filing, valued at $3.46 million. Spirit Hospitality itself made multiple unsecured claims worth just more than $325,000, claiming the hotel owes it back pay on a loan, liability insurance and management fees. The documents show Spirit values the hotel at $13 million based on its own appraisal. Spirit representatives did not respond to a request for comment Thursday morning.
Source: BizWest

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