|By Sandra Baker, Fort Worth
Star-TelegramMcClatchy-Tribune Regional News
Feb. 01, 2013--FORT WORTH -- The owners of the Sheraton Hotel and Spa downtown are looking for another buyer after a proposed deal to sell the bankrupt property to Dallas-based Prism Hotels & Resorts stalled, an attorney for the hotel's owners told a bankruptcy judge Thursday.
"I can't say it's dead, but I can't say they're as active as they were a month ago," said Michael Warner, the Fort Worth attorney representing 1701 Commerce Llc.
Prism emerged as a potential buyer in October and offered $55 million for the 431-room hotel. Steve Van, Prism's president and CEO, did not return a call seeking comment Thursday.
1701 Commerce Llc., an entity of Vestin Originations in Las Vegas, is selling the hotel as part of its Chapter 11 reorganization.
Prism was expected to close on a purchase of the hotel by Jan. 1. But it started backing away from the deal when legal issues arose late in the bankruptcy process. Another lien on the property and easements over a parking lot and the hotel's rooftop threaten to block clear title to the property.
In an effort to move the sale along, 1701 Commerce Llc. was given the go-ahead by Judge D. Michael Lynn on Thursday to foreclose in an effort to wipe out liens for another posssible buyer.
The debtor is still considering a $49 million sale with an investor group composed of some of the former owners, Presidio Hotel Group, if a higher offer doesn't emerge within a few weeks. The group doesn't have much time, though, to close its deal. Dougherty Funding, the senior lender, said in court documents that it will foreclose on the hotel March 5.
Vestin filed for bankruptcy protection in 2012 after a series of lawsuits in state District Court in Tarrant County with Dougherty Funding in Minnesota. The two loaned money to Presidio to buy and renovate the hotel.
Also at issue in the bankruptcy case is an agreement with the owners of a parking lot across from the hotel and revenue from a telecommunications company that leases the rooftop for its cellphone antennas.
In 2011, Dougherty and Vestin became embroiled in lawsuits over who had the right to foreclose after Presidio defaulted on more than $56 million in notes. In lieu of foreclosure, Presidio deeded the property to Vestin, which was the junior lender behind Dougherty, sparking the legal filings.
Sandra Baker, 817-390-7727
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