October 28, 2008 - Vail Plaza Development LLC, Vail CO

The owner of Vail Plaza Hotel & Club has filed for Chapter 11 bankruptcy protection in an effort to buy time to secure funds after the economy soured a loan deal that was in the works.

Vail Plaza Development LLC, which developed the hotel and condo project last December, listed $138.7 million in assets and $39.6 million in debt on the petition filed in U.S. Bankruptcy Court in Denver.

Owner Walder Prado said trouble began when the construction loan came due in September. He had been working with a lender for several months to secure a permanent loan.

"We were very close in August to consummating the new loan to pay off the existing loan, and then the bomb exploded with all the turmoil on the financial market," he said. "This stopped the process of the new loan."

Capmark Bank, a unit of Capmark Financial Group, holds a $38.2 million claim, according to court papers. The lender, which sued the Vail-based developer in Colorado's Eagle County court, holds a lien on the property valued at $60.7 million, court papers show.

The 110-room, $156 million Plaza has two restaurants, a bar and 38 fractional-ownership condominiums. Thirty- two percent of the condos are sold, and another $5 million in deposits from prospective buyers is waiting for the lien to be removed so they can close.

The hotel employs 220 people, and business continues as usual. "The objective is to gain time for this market to come closer to normal," Prado said.

Prado is seeking a $70 million loan to pay off the construction loan, for working capital and to remove the lien from the property. Prado has four months to file a plan with the court.

Original story - DenverPost.com