Ownership of Aspen Kitchen is in question
The Aspen Times
C2 Photography/courtesy photo |
Just who owns Aspen Kitchen? That question is the hands of a federal judge in New York.
In another wrinkle related to the upscale eatery’s bankruptcy case, California-based creditor Hanford Holdings disputed the restaurant’s ownership by introducing court papers May 24 asserting it was the majority owner and in control of the restaurant.
That claim was at odds with the position of Rocky Aspen Management 204, which has held itself to be the controlling owner of Rocky Aspen LLC, the parent company of both Aspen Kitchen and the downstairs Rec Room cocktail lounge.
Rocky Aspen LLC contends Hanford pushed it into bankruptcy when on Feb. 29 it “accelerated” the payment of the loan and demanded it be paid in full, with interest, totaling more than $3.5 million. Rocky Aspen LLC couldn’t make good on the payment and declared Chapter 11 bankruptcy March 19.
The restaurant and bar opened in December. It is located at 204 S. Galena St. and continues to operate as it attempts to reorganize its debts through the bankruptcy.
Hanford, along with another lender, AH DB Kitchen Aspen Investors, had previously alleged that Rocky Aspen LLC had no legal authority to file for bankruptcy. They both have motions to dismiss the case pending before a bankruptcy judge.
AH DB Kitchen Aspen Investors alleged it arranged or provided more than $9 million in capital for the construction of Aspen Kitchen, while Hanford said it gave a $3.2 million bridge loan to Rocky Aspen LLC in July. While they are the financial supporters in Rocky Aspen LLC, the restaurant and bar’s operations are handled by a third member, Rocky Aspen Management 204, according to court filings.
The dispute spilled out of the Colorado bankruptcy court, the venue for the Chapter 11, on June 8, when Rocky Aspen LLC sued Hanford in the federal court for the Southern District of New York.
Rocky Aspen LLC’s lawsuit was in response to Hanford’s position that it was the controlling owner of all of the membership interests in Rocky Aspen LLC.
Hanford argued that terms of the loan stipulated it would receive 100 percent of Rocky Aspen’s ownership interests as security on the loan. Hanford held a foreclosure sale for the ownership interests on May in Chicago. There were no bidders except for Hanford, which acquired the interests for $10,000.
Rocky Aspen’s suit disputed that assertion.
“The claim by (Hanford) that it had become the owner of all of the membership interests of Rocky Aspen was incorrect, unfounded and untrue,” the suit said. “While Hanford did conduct a private foreclosure sale, … those membership interests constituted only small minority percentage of all of the Rocky Aspen membership interests.”
Hanford has until July 25 to file a response to Rocky Aspen’s suit.
Among Rocky Aspen’s local creditors are EBC Support ($14,760), Empire Drywall ($15,000), Lassiter Electric ($113,170), Marquez Maintenance ($20,187.50), Specialized Protective Services ($16,905), Summit Construction ($308,983) and Z Group Architects ($33,320).
A bankruptcy trustee, the person who collects the debtor’s monthly payments and distributes them to creditors, has yet to be appointed to the case.
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