|By Sandra Baker, Fort Worth
Star-TelegramMcClatchy-Tribune Regional News
Sept. 26, 2012--Dallas-based Prism Hotels & Resorts has a contract to buy the Sheraton Hotel and Spa in downtown Fort Worth for $55 million, but the deal must be approved by a bankruptcy judge.
The contract was filed Tuesday in the case involving 1701 Commerce Loc., the Las Vegas entity set up by Vestin Originations, a lender on the hotel. Vestin took over ownership and the hotel's operations earlier this year after the original owner, Presidio Hotel Group, handed over the property in lieu of foreclosure. A court hearing on the sale hasn't been scheduled.
Prism is buying the 431-room hotel under the name PHC Management, the court filing said. Vestin hired Prism this year as a consultant.
John Bailey, Prism's chief financial officer, did not return a message Tuesday seeking comment.
Presidio bought the hotel in 2006, borrowing $45 million from Dougherty Funding in Minnesota to pay for the property and renovations. Presidio later borrowed about $11.8 million from Vestin to finish the project. Dougherty and Vestin entered into an agreement making Dougherty the senior lender and Vestin junior lender.
When Presidio defaulted on the loans last year, both lenders pursued foreclosure. Presidio deeded the property to Vestin, saying it posted the property first, and that set off a series of lawsuits and Vestin's bankruptcy filing March 26.
Dougherty claimed Vestin violated their earlier agreement by setting up an entity to transfer loan documents and accept title to the property. Dougherty pursued foreclosing on Vestin, which then filed for bankruptcy protection.
Vestin has since filed a reorganization plan. It has been given until Nov. 24 to win approval from creditors and the court or face foreclosure by Dougherty. The sales price is expected to cover the lenders' claims as well as other creditors.
Sandra Baker, 817-390-7727
(c)2012 the Fort Worth Star-Telegram
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