CHARLESTON, W.Va. — The owners of a Morgantown hotel, who were just kicked out of bankruptcy court in the Northern District of Georgia, have filed again for Chapter 11 reorganization — this time in the Middle District of Florida.
Mountain Blue Hotel Group filed again for bankruptcy on Wednesday.
Earlier that day, U.S. District Judge Lisa Ritchey Craig of the Northern District of Georgia filed an order denying a motion to reconsider Mountain Blue’s dismissal from bankruptcy court.
Judge Craig first dismissed Mountain Blue from its bankruptcy case 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.
“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,” Judge Craig wrote in her order this week.
Judge Craig’s earlier order had 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.
The head of Mountain Blue, William Abruzzino, is a Shinnston, West Virginia native, who now lives in Florida.
Abruzzino 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 by Mountain Blue 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.
A lawyer for Mountain Blue’s lender filed a notice in the civil case in the Northern District of West Virginia that the new bankruptcy case had been filed. An automatic stay would be placed on the State of West Virginia’s claim, as well as the lender’s claim, because of the new bankruptcy filing.
A bankruptcy case over sister company Mountain West’s hotels in Clarksburg and Elkins was dismissed earlier this year.
A federal lawsuit over default of those hotels has continued to move forward in the Northern District of West Virginia. The State Tax Department claims it is owed $720,000 in unremitted sales taxes from those hotels.