Aspen lodge says it will operate through bankruptcy

Rick CarrollThe Aspen TimesAspen CO Colorado

ASPEN – The financially strapped Mountain House Lodge said Thursday that it will continue to operate in the wake of a Chapter 11 bankruptcy petition it filed Tuesday, a move that staved off a foreclosure auction that was scheduled for Wednesday.”This is merely a bump in the road for the property’s owners,” said Alan Finnegan, president of All Seasons Resorts Lodging, which manages the 26-room lodge, in a statement. Bankruptcy papers show that the budget lodge has $4.16 million in assets and $7.9 million in liabilities. The biggest creditor is the Aspen branch of Community Banks of Colorado, which is owed $5.92 million, the bankruptcy says. Of that amount, $1.9 million in unsecured, the petition says. That note is what drove the lodge into bankruptcy. “Mountain House Partners filed for Chapter 11 protection this week as part of the process of restructuring a loan on Mountain House Lodge,” said a statement from All Seasons Resorts Lodging. Despite its financial struggles, the lodge’s business improved from 2011 to 2012, bankruptcy records show. In 2011, it generated $680,018 in overnight room rentals; in 2012, the figure jumped to $780,349.Since 2007, the East Hopkins Avenue lodge has been owned by Mountain House Partners LLC, based in Holladay, Utah. Kenneth North is the LLC’s manager, court papers show. Among its debts is $52,755 in 2011 property taxes owed to Pitkin County. That bill is being contested through an appeal filed in 2012 in Pitkin County District Court by Mountain House Partners, bankruptcy records show.The city of Aspen is listed as one of the lodge’s largest 20 unsecured creditors and is owed $8,000 in sales taxes, the bankruptcy said. Mayor Mick Ireland had urged the city to consider buying the lodge, but the idea never gained any traction. In addition to the foreclosure action being put on hold, the bankruptcy relinquishes the receivership Mountain House Lodge had been in since November. Then, Community Banks had obtained a court order to have receiver Z/2 Partners of Greenwood Village manage the lodge’s finances. “Prior to the voluntary petition commencing this Chapter 11 proceeding was filed, (Mountain House Lodge) and (Community Banks) reached an agreement that the receiver would fully relinquish control over (Mountain House’s) property if All Seasons Resort Lodging, the manager of the hotel, would remain as manager of the hotel on a post (bankruptcy) petition basis,” the bankruptcy says. “(Mountain House Lodge) intends to retain All Seasons Resort Lodging as manager of the hotel on a post-petition basis.”Mountain House Lodge has until April 25 to provide the bankruptcy court with details of how it will operate through Chapter 11 along with any changes to its business plan. U.S. Bankruptcy Judge Michael E. Romero is presiding over the case, which was filed in Denver federal court. A meeting of creditors is scheduled for April 30.David Rich, of the Denver law firm Minor & Brown PC, which filed the bankruptcy petition on behalf of the lodge, could not be reached for immediate comment