|By Mark Belko, Pittsburgh
Post-GazetteMcClatchy-Tribune Regional News
Feb. 12, 2011--The battle over the former Hilton Pittsburgh may be drawing to an end.
A Tampa cardiologist and New York lender BlackRock Financial Management Inc. appear to be on the verge of a settlement that could bring the city's largest hotel out of bankruptcy and get a half-finished expansion project moving again.
In a motion filed Friday in U.S. Bankruptcy Court, attorneys for Kiran C. Patel stated that he and BlackRock had reached "an oral settlement" in the case after a full day of mediation earlier in the week.
The motion went on to say that a draft of the settlement had been exchanged among the lawyers for each side and are expected to be finalized early next week.
No terms of the apparent settlement were included in the court document, and attorneys for the parties involved declined to comment on the matter Friday.
The development could pave the way for the former Hilton to emerge from Chapter 11 bankruptcy and for the completion of an unfinished exterior addition that has marred the hotel entrance and Downtown for nearly two years.
In the motion, attorneys for Dr. Patel said the settlement would require modifications to the cardiologist's Chapter 11 plan of reorganization, suggesting that he would retain at least some control over the Downtown landmark.
Dr. Patel became equity owner of Shubh Hotels Pittsburgh, the former Hilton owner, last fall. The hotel has been reflagged as the Wyndham Grand Pittsburgh under Wyndham Hotel and Resorts since he took control.
David Rudov, Shubh's attorney, declined to comment on a possible settlement or any details involving it.
"I will say this is a positive development and should pave the way to a consensus plan of reorganization and the successful result to a long-standing saga," he said in reference to Friday's motion.
"Hopefully, this will result in the hotel returning to its prominent status in the city of Pittsburgh."
If finalized, the settlement would bring a surprising and stunning conclusion to a bankruptcy case that has been filled with rancor between Dr. Patel and BlackRock.
The acrimony became so great that U.S. Bankruptcy Judge Jeffery A. Deller last week appointed a trustee to oversee operations at the former Hilton. At the time, a settlement appeared to be remote.
BlackRock has painted Dr. Patel as part of the problem at the troubled hotel and has tried to link him to questionable spending by former hotel asset manager Jai Lalwani and others.
At the same time, Dr. Patel has charged that BlackRock wasn't willing to risk any of its own money to shore up the sinking business and relied on a "fool like me to do it" in lending the hotel millions of dollars to stay afloat.
Hilton Hotels & Resorts terminated its franchise license with Shubh in September. BlackRock, in response, declared Shubh in default of its $49.6 million mortgage. When the lender moved to foreclose, Shubh filed for Chapter 11 bankruptcy protection.
Mark Belko: email@example.com or 412-263-1262.
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