Judge rules again that owners of Morgantown hotel are dismissed from bankruptcy court

CHARLESTON, W.Va. — Morgantown hotel owners who were kicked out of bankruptcy court are going to stay out.

Mountain Blue Hotel Group’s Chapter 11 Bankruptcy case was dismissed a month ago because the company had failed to meet a deadline to provide evidence of workers compensation insurance.

The company provided proof after the deadline had passed and filed a motion to reconsider its dismissal.

On Wednesday, U.S. District Judge Lisa Ritchey Craig of the Northern District of Georgia filed an order denying the motion to reconsider. It was pretty blunt.

“For the reasons stated on the record at the hearing held on Nov. 14, 2017, the Debtor’s Motion for Reconsideration of Order Dismissing Chapter 11 Case is DENIED.

MORE: Read the federal judge’s order.

Judge Craig first issued an order Oct. 16 dismissing Mountain Blue’s bankruptcy case because of the workers compensation insurance.

That kicked the dispute back to federal court, where Mountain Blue and its lender have been battling over control of the defaulting hotel. U.S. Circuit Judge Irene Keeley granted an order Oct. 18 appointing a receiver for the hotel.

The financial troubles of the Hilton Garden Inn have been notable and tangled. The dispute is over payment of a $15,470,000 loan.

William Abruzzino, the head of Mountain Blue, and his co-investors are involved with several simultaneous bankruptcies or civil suits over hotels in Morgantown, Clarksburg and Elkins, plus the Crossings Mall development in Kanawha County.

Senator Joe Manchin and longtime advisor Larry Puccio were initially listed as investors, although a recent filing in bankruptcy court had removed their partnership, AA Properties, from the list. Their initial presence in the lawsuit was described by their aides as as a mistake.

The Morgantown Hilton had been subject to bankruptcy just a few years ago, meaning that its ownership group was going through its second bankruptcy in short order.

Monongalia County was trying to collect thousands of dollars in back taxes that the hotel had collected from guests but had not properly passed on to the county. And hotel workers said their pay and insurance coverage had been spotty during the troubled times. The Hilton franchise agreement was in jeopardy.

Lawyers for the state filed a motion to intervene early this month in the federal lawsuit. The state claims it is owed $480,000 in taxes that were collected over several years by the Morgantown hotel but then not passed on.





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