CHARLESTON, W.Va. — The lender of $15 million for a Morgantown hotel wants a federal reorganization case to be dismissed unless owner Mountain Blue Hotel Group prove all of its investors have signed off on the bankruptcy.

Who that might be is an interesting question.

This past week, the lender submitted the original articles of organization and operating agreement for Mountain Blue from 2013. The operating agreement lists developer William Abruzzino and nine more investors including AA Properties.

AA Properties is a partnership between former state Democratic Party Chairman Larry Puccio and Sen. Joe Manchin. Puccio signed the operating agreement as the representative of AA Properties.

In the months since the defaulting hotel has been in the news, Puccio and Manchin have said they are no longer investors. A lawyer for Manchin has said their listing in a lawsuit over the hotel was a mistake.

The operating agreement for Mountain Blue says no member may voluntarily withdraw from the company without the written consent of all members. It says interests in the company may not be sold, except to other members.

In October, in an earlier bankruptcy filing, Mountain Blue did not list AA Properties among its investors.

Now the main creditor in the bankruptcy case wants evidence that the investors in Mountain Blue actually want to move forward with the proceedings in U.S. Bankruptcy Court for the Middle District of Florida. The creditor filed its motion to dismiss this past Wednesday.

“As established by its own initial filings in the case, debtor Mountain Blue Hotel Group does not have the authority to proceed in bankruptcy as it failed to adhere to its own corporate formalities and obtain proper authority to commence this bankruptcy case,” wrote lawyers for the main creditor.

The lender notes that, according to Mountain Blue’s articles of incorporation, all the members must consent to a bankruptcy filing.

“Debtor has not provided any evidence of a resolution authorizing a bankruptcy proceeding,” wrote lawyers for the main creditor.

The lawyers note that Abruzzino, whose businesses are involved with a variety of lawsuits and bankruptcy proceedings, signed the Mountain Blue bankruptcy petition as managing member.

“There is no evidence that the debtor’s other members signed a filing resolution,” the lawyers wrote.

“Under these circumstances it is clear Debtor has failed to obtain proper corporate approvals for its bankruptcy filing.”

A preliminary hearing has been set for 3:30 p.m. Dec. 19 at the federal courthouse in Tampa.

This is Mountain Blue’s second bankruptcy filing over the past few months in the case of the Hilton Garden Inn in Morgantown. The first, filed in Georgia, was dismissed when Mountain Blue failed to provide all of its required financial information.

The hotel was about to be put up for sale when Mountain Blue filed the second bankruptcy.

The lender says Mountain Blue has endangered its $15 million investment by endangering the Hilton franchise fee and falling hundreds of thousands of dollars behind on its state and local taxes.

West Virginia’s State Tax Department has filed a motion asking for the bankruptcy district to be moved to West Virginia.

The state claims Mountain Blue owes it $587,000 in taxes that were collected from customers and then not passed on, dating back to 2015.

Monongalia County took Mountain Blue to court this past summer over $148,000 in business and occupation taxes that were collected and then not passed on. The county’s liens date back as far as late 2014.

Leah Solomon, a special servicer for the loan, recently provided an affidavit in bankruptcy court. Solomon, who is asset manager of LNR Parners of Florida, oversees the hotel loan.

Her affadavit filed this past Tuesday says that if called to testify she could speak knowledgeably about several aspects of the loan.

Solomon’s affidavit included, as exhibits, the original loan from Sept. 17, 2013, as well as several other financial documents from the hotel agreement.

The original loan lists Abruzzino and the other investors, including AA Properties with a 12 percent interest in Mountain Blue Hotel Group. Puccio and Manchin have a 50-50 investment in AA.

Her affidavit also goes into the troubles of Abruzzino’s other properties.

“Debtor’s financial problems appear to be systemic among other affiliated companies with common ownership and management,” according to the affidavit.

The document then goes on to list:

Tara Retail Group, which filed bankruptcy in the Northern District of West Virginia on Jan. 24. The bankruptcy case was filed hours before a federal court receivership hearing for Crossings Mall in Kanawha County.

Mountain West Hospitality, which filed in U.S. Bankruptcy Court for the Middle District of Florida on May 12 hours before a federal court receivership hearing for hotels in Clarksburg and Elkins. The bankruptcy case was dismissed with prejudice 45 days after it was filed.

Emerald Grande, LLC, owner of the La Quinta Inn at Crossings Mall, which filed bankruptcy on Jan. 11.

Center Designs LLC in U.S. Bankruptcy Court for the Middle District of Florida filed bankruptcy on March 13. It was dismissed with prejudice on Sept. 5.

Covington Place Associates filed bankruptcy in the Middle District of Florida on April 3. It was dismissed with prejudice on Sept. 5.

Retail Designs filed bankruptcy in the Middle District of Florida on March 13. It was dismissed with prejudice for six months on Sept. 5.

Interstate Properties filed bankruptcy in the Middle District of Florida on May 14. It was dismissed with prejudice on Sept. 5.

A motion filed on behalf of the lender this past Tuesday asks to be excused from turning property — including control over the hotel over to Mountain Blue.

“Debtor will not utilize property for creditors,” the lawyers wrote. “Debtor’s self-interest and self-dealing drives its decisions. For example, there is over $1 million in pre-petition cash which remains unaccounted for by Debtor.”

That motion goes on to say, “Debtor’s sponsor William Abruzzino’s real estate empire is crumbling. Abruzzino has well over $100 million in loans that are in default and in bankruptcy or foreclosure. It appears debtor has diverted cash from the property, perhaps even to bolster other failing properties of Mr. Abruzzino.”

The lawyers for the lender also contend the latest bankruptcy filing won’t last long.

“The anticipated short term of this bankruptcy case is further reason not to terminate the receivership,” the lawyers wrote. “The secured creditor anticipates the duration of this bankruptcy proceeding will be short.

“Debtor filed the petition without the proper corporate authority. Debtor failed to have an independent director approve this filing. Debtor’s filing is also in bad faith.”

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