Lender sues Aspen Club owner over $8.6 million note
January 12, 2018
A Dallas-based lender is suing businessman Michael Fox for allegedly defaulting on an $8.6 million note, the latest legal setback for the owner and president of the Aspen Club.
Revere High Yield Fund filed suit Wednesday in Pitkin County District Court. The complaint alleges that Aspen Club Redevelopment Co. entered a loan agreement with Revere in June 2015 before amending that agreement in May 2017. Fox, however, is being sued individually while the Aspen Club is not being held liable for the debt.
The suit claims Fox executed a guaranty agreement on the loan, stating that he would honor the loan terms.
"Mr. Fox breached the guaranty by, among other things, failing to fulfill his obligations as guarantor," the suit says. "In particular, Mr. Fox has not repaid the indebtedness evidenced by the term note."
Fox could not be reached for immediate comment Thursday, but said in an email to The Aspen Times that the lawsuit is a "non-story."
Fox's Aspen Club also faces foreclosure by lender FirstBank, which began proceedings in early November to seize the property because it claims it is owed $30 million on a $45 million loan the club received in May 2016.
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The Aspen Club hasn't formally responded to the foreclosure action, yet Fox has maintained that refinancing efforts are ongoing.
In December, FirstBank assigned the deed of trust on the outstanding loan to GPIF Aspen Club, an LLC that was formed days before the conveyance. A deed of trust legally empowers the lender to foreclose on the property in the event that the borrower defaults on the loan.
Less clear is how that will affect the foreclosure proceedings.
"This is part of our restructuring process," Fox said at the time. "I cannot share any details at this point, but it is a good thing for the project."
Feb. 20 is the deadline for the Aspen Club to file a notice of intent to cure the debt with the Pitkin County Treasurer's Office, with the cure deadline set March 6. The next day is the earliest a foreclosure auction would occur.
The Aspen Club project, located at 1450 Ute Ave., includes plans to remodel the 40,000-square-foot Aspen Club and Spa building and the construction of a 54,000-square-foot lodge with 20 timeshares, while 13,600 square feet of development would account for 12 multi-family affordable-housing units.
Most of the construction work has been stalled because a number of subcontractors have said they haven't been paid for their labor and materials. The general contractor, PCL, also is attempting to foreclose a $17.7 million lien it filed against the Aspen Club on Sept. 26. That suit is pending in Pitkin County District Court.
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