Sales scheduled for defaulting hotels in Clarksburg, Elkins

CHARLESTON, W.Va. — Defaulting hotels in Clarksburg and Elkins are scheduled for auction on the courthouse steps.

A Hampton Inn in Elkins is set for sale at noon Thursday. A Hilton Garden Inn in Clarksburg is to be sold at 3:30 p.m. the same day.

The current owner of the hotels, Mountain West Hospitality, is objecting to the sale in federal court. The corporation has filed a motion aimed at halting the sale in U.S. District Court for the Northern District of West Virginia.

On Monday afternoon, U.S. District Judge Irene Keeley entered an order scheduling an evidentiary hearing on a preliminary injunction motion. The hearing is set for 12:45 p.m. Tuesday in Clarksburg. Counsel for both Deutsche Bank and Mountain West are required to appear in person.

“During the six months since its filing, this case has taken an unusual course,” Judge Keeley wrote.

Mountain West is involved in a lawsuit with the lender of $17 million in outstanding debt for the two hotels. The case was filed originally on May 20, but diverted into U.S. bankruptcy court, where it was eventually kicked out after Mountain West failed to meet deadlines for its financial documentation.

The head of Mountain West’s investment group is developer William Abruzzino, a Shinnston native who now lives in Florida. Lawyers for Abruzzino asked that he be allowed to speak by telephone during Tuesday’s hearing. The request was granted.

Abruzzino also heads Mountain Blue LLC, which is involved in the bankruptcy case of the Hilton Garden Inn in Morgantown. The Chapter 11 filing in that $15 million default case came right after the hotel was put up for sale. 

All the hotels are defaulting and owe hundreds of thousands of dollars in back taxes to state and local government.

Abruzzino and his Tara Retail LLC are also in bankruptcy proceedings and civil suits over the Crossings Mall shopping center in Elkview. The bankruptcy case was filed right after Crossings Mall was set for auction.

In the case of the Elkins and Clarksburg hotels, lawyers for Mountain West say the matter hasn’t been fully litigated and that the defendant needs more time to refinance the property.

“The Plaintiff has done nothing to market these multimillion properties and simply intends to sell them on the courthouse steps to the lowest bidder without a minimum bid being stated,” wrote the lawyers for Mountain West.

Mountain West’s attorneys say a 2012 appraisal of the Clarksburg property values it at $21.5 million while a 2012 appraisal of the Elkins property values that hotel at $8.7 million.

The Mountain Blue lawyers contend that if the hotels are valued together at $30 million but are sold to satisfy the debt of $17 million then Mountain West will be out $13 million in equity.

Meanwhile, the lawyers wrote, Mountain West has started an aggressive refinancing effort and believe it will obtain financing to pay the outstanding debt from Peachtree Hotel Group.

“The failure of the Plaintiff to aggressively market said properties and conduct reasonable sales of the same based upon its fair value, creates a situation where the Defendant will suffer irreparable harm,” wrote lawyers for Mountain West.





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