Second creditor tries to foreclose on Aspen Club
The same parties that were fighting in bankruptcy court over the Aspen Club & Spa property have taken the dispute to the Pitkin County Treasurer’s Office.
EFO Financial on Wednesday filed documents with the office to foreclose on the property, following through on statements it made in previous court filings that it will fight for what it maintains are its senior rights on the Aspen Club.
The foreclosure by EFO Financial, which is based in Florida, puts it against another creditor who also is trying to foreclose on property at 1450 Ute Ave. on the east side of Aspen.
GPIF Aspen Club is a limited liability company claiming it is owed more than $42 million by the club. GPIF is making a run at foreclosure in filings against the club in September in both Pitkin County District Court and the Treasurer’s Office.
Yet even though GPIF, a secured creditor, is owed the most money in the years-long saga, EFO maintains it is first in the line of creditors that collectively are owed more than $100 million from the stalled health club and residential project.
EFO provided court approved debtor-in-possession financing during when the Aspen Club was clinging to its future in bankruptcy court. Aspen Club declared Chapter 11 in May 2019.
All told, EFO floated nearly $7.5 million to the club during the duration of the bankruptcy. The terms of the secured loan included Aspen Club would be in default if the bankruptcy was dismissed.
That’s what happened when a bankruptcy judge dismissed the case in September, after the club had no financial recourse when the same judge denied its request for another $140 million in financing from EFO.
GPIF Aspen attempted to pay the debt by wiring $7,467,946.22 to EFO on Oct. 2. EFO, however, successfully convinced a judge to put the money in the court registry pending a further order.
“If EFO sends the amount back to GPIF, GPIF will argue they have fully tendered,” EFO attorneys argued in a pleading. “If EFO keeps the payment but reserves all rights, GPIF will argue there has been some sort of accord and satisfaction. EFO does neither and has no time for such ‘gotcha’ litigation tactics, and this court should not either.”
The order in which the creditors line up in the event of a foreclosure sale is driving the dispute.
On Oct. 16, creditor Gould Construction and a group of mechanics’ liens holders — owed more than $25 million for their labor and materials — filed a motion in bankruptcy court joining GPIF and Revere Capital High Yield Fund, which says it is owed $15 million for a bridge loan to the club, to determine where EFO stands as a lienholder.
Revere’s Clark Briner was given control of the club by Michael Fox on Sept. 1, according to court records.
As of the close of business Wednesday, EFO’s foreclosure documents were not available; however, a notice of the foreclosure had been posted by the Pitkin County Clerk & Recorder’s Office.
Efforts to reach parties involved in the dispute were unsuccessful Wednesday.
The construction project site for the Aspen Club & Spa remains preserved, with 15 of its townhomes between 60% and 80% complete, six condominiums 30% complete, and the commercial component 30% complete, according to filings in the bankruptcy case.
Editor’s note: The original version of this story incorrectly reported the amount owed to Revere Capital; that figure has been corrected.
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