Business Monday: Despite pandemic, lender says it will still back Aspen Club
The coronavirus pandemic that has battered the economy has not deterred a Florida lender’s intentions to float as much as $140 million in financing to The Aspen Club and Spa so it can emerge from bankruptcy and restart its dormant redevelopment project.
That’s what an attorney representing EFO Financial said during a telephonic hearing Friday.
“We’re committed to this project and want to see it be successfully resolved,” said Steven Berman, counsel for EFO Financial.
The Aspen Club’s attorney James Markus also said while most of the company’s creditors are on board with the exit plan that hinges on the loan, two creditors “want to kill the plan.”
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GPIF Aspen Club and Revere High Yield Fund, the holders of respective loan notes of $30 million and $12 million, have said the plan is unrealistic and benefits insiders.
Their attorneys also convinced Judge Joseph Rosania Jr. to indefinitely postpone the confirmation hearing, which had been set for April 20 over the Skype video platform due to the governor’s stay-at-home orders that go through April 26.
They argued that holding a key hearing over five days with 10 witnesses on a video platform would be impractical, confusing and deny the creditors their due process. Rosania set May 11 to re-evaluate the matter based on the where government orders stand, including the U.S. District Court for the District of Colorado’s delay of all criminal and civil trials until at least May 1.
The outcome of the confirmation-plan hearing will determine whether the club will stay afloat under its current ownership led by Michael Fox. If Rosania rejects the plan, which also requires creditor approval, that would open the door for a buyout or foreclosure sale, for instance.
The Club says with as much as $140 million in financing, it can pay back its creditors — including local construction firms that have tallied up more than $20 million in unpaid bills — and get the residential and club redevelopment project rolling at 1450 Ute Ave. on the east side Aspen.
EFO Financial had set April 30 as the deadline for The Aspen Club to receive approval, but Berman said “we’re not imposing any sort of drop-dead deadline. And we agree that an in-person hearing would be far better for everyone. It’s what we are used to as lawyers and judges, but it’s not the only way the hearing can be conducted.”
Time is of the essence so the project can get started and workers can get working, he said. More delays in the case don’t “benefit anybody other than the parties opposing confirmation,” he said.
“It hurts the workers who are ready to be mobilized once the stay-at-home is lifted,” Berman said. “There are going to be workers out there that need to work, and this is a project where a lot of people can be employed.”
He said the mechanics’ lien holders would be paid in full.
“We need to get the shovels in the ground by June 1 … and another continuance, continuance, continuance will have its own economic consequences which are not consistent with a successful emergence” from bankruptcy.
The Aspen Club and Spa and The Aspen Club Redevelopment Co. declared their respective Chapter 11 bankruptcies May 16 and 17. The cases were consolidated May 20, and are being jointly administered through the bankruptcy court.
The project — which has been on hold since the fall of 2017 — includes a remodel of the 40,000-square-foot Aspen Club and Spa building, the construction of a 54,000-square-foot lodge with 20 timeshares and 12 multi-family affordable-housing units.
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