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United States News Title: Hudson Valley Resort files for bankruptcy (150 jobs in jepordy) Hudson Valley Resort files for bankruptcy Text Size: A | A | A Print this ArticlePrint this Article Email this ArticleEmail this Article ShareThis Photo 1 of 1 | Zoom Photo + Top Photo The Hudson Valley Resort in Kerhonkson has filed for bankruptcy in an effort to avoid foreclosure.THR/Steve Borland Adam Bosch By Adam Bosch Times Herald-Record Posted: February 18, 2010 - 12:30 PM KERHONKSON — Suffocating under more than $26 million of debt, the Hudson Valley Resort & Spa has declared bankruptcy in a last-ditch effort to avoid foreclosure. Owners of the resort filed Chapter 11 bankruptcy in January, just as the holder of their largest mortgage finished a foreclosure case against them. Chapter 11 could allow the owners, who operate under Everyday Logistics LLC, to reorganize debts and keep the hotel. The 323-room resort, formerly known as the Granit Hotel, has stayed open while its owners and lenders battle in court. Eliot Spitzer, one of the Hudson Valley Resort's managing partners, said he couldn't talk about the bankruptcy when contacted at his Monsey office this week. (He is not the former governor of New York.) “This does not affect the actual operation of the hotel,” said Spitzer, who owns the property with his partner, Michael Steinberg. “I think we'll be all right when it's all over.” Spitzer and Steinberg owe more than $25 million on six mortgages. They purchased the hotel, its 18-hole golf course and the 400-acre property in 2006 for $18.5 million. The full-market assessed value of the property is $5.8 million. The first signs of trouble came in September 2008, after the owners failed to make mortgage payments for four months. In court papers, Spitzer said the economic recession cut the resort's revenues. Kennedy Funding, holder of a $9.8 million mortgage, foreclosed on the property in September 2009. A judge delayed the appointment of a receiver, or an independent party to sell the property, until Jan. 7. But Spitzer and Steinberg filed for bankruptcy that same day to stall the foreclosure. Tom Genova, a bankruptcy lawyer in Poughkeepsie, said that bankruptcy is sometimes used to renegotiate mortgages when neither side will benefit from foreclosure. “If the bank forecloses, what do they get? They get a hotel in the middle of winter in Kerhonkson,” Genova said. Hudson Valley Resort & Spa is the largest private employer in this mountain town, with some 150 people on its payroll. The resort owes the Town of Rochester nearly $40,000 in unpaid taxes. “My greatest concern is for the employees,” Rochester Supervisor Carl Chipman said. “A lot of families depend on that place for income.” Spitzer and Steinberg had grand plans to make the resort a Marriott-branded hotel and build 300 upscale homes on the property. They contracted with PGA champion Vijay Singh to redesign the golf course. None of those plans materialized. Henry Zabatta, who owned the hotel when it was the Granit, is familiar with the scenario that's unfolding. Zabatta went bankrupt on the hotel in 1997 with a $5 million mortgage and said the current owners paid too much for it. “I don't know who brokered that deal, but it was highway robbery,” he said. “You can't possibly operate a hotel in this region with that much debt.”
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