May 5--The owners of the downtown Peery Hotel filed for Chapter 11 bankruptcy this week -- a move that could help protect them from demands they provide rooms to the Salt Lake Organizing Committee for the 2002 Winter Games. 

Twin Hotel Development, which acquired the historic 73-room property in 1998, filed to reorganize its debts in part because of the pressure it was feeling from a lawsuit SLOC filed in November. 

The dispute "was definitely one of the factors and it still must be resolved," said Salt Lake City attorney Joel Marker, who is representing Twin Hotel in its Chapter 11 case. 

A separate lawsuit with the previous owners over a note and a pending foreclosure by the mortgage holder also contributed to the decision to seek bankruptcy protection, Marker said. 

Under Chapter 11, a company is given bankruptcy court protection from creditor lawsuits while it formulates a plan to repay its debts. 

SLOC filed its lawsuit in November in 3rd District Court in Salt Lake City. It said Twin Hotel was trying to back out of a deal that had been struck with the previous owners of the hotel -- Peery Management -- to provide 60 rooms at $164 a night for the 17 nights of the winter sports extravaganza. 

The value of that deal was more than $170,000. 

SLOC contended in its lawsuit the Peery's new owners did not believe they were obligated to honor the contract. 

It alleged Twin Hotel wanted to renege on the agreement so it could rent the Peery's rooms to Nike Corp. at far higher prices. 

"The Chapter 11 filing puts our whole dispute on hold," said SLOC spokeswoman Caroline Shaw. 

It will be up to the judge assigned to the Chapter 11 case to determine whether SLOC can continue with its lawsuit in 3rd District Court or if the matter will remain in bankruptcy court. 

Marker said the Peery Hotel's owners recently hired a new management company to run the property and are optimistic about its future operations. 

In its filing, Twin Hotel said it owes more than $1.4 million to its 20 largest unsecured creditors. The Peery Hotel at 110 W. 300 South in Salt Lake City employs 27 people. 

Earlier this year, SLOC filed a lawsuit claiming the owner of Super 8 motel in Nephi did not want to honor a 40-room advance reservation for International Olympic Committee members. 

The lawsuit claimed SLOC signed an agreement last year with the motel's previous owners, but that the new owner, a Wyoming corporation, believed it could get more money for the rooms. 

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(c) 2001, The Salt Lake Tribune. Distributed by Knight Ridder/Tribune Business News. NKE,