Mountain Blue Hotel Group, Owner of a Hilton Garden Inn in West Virginia, trying to stop auction of hotel
David Beard | The Dominion Post, Morgantown, W.Va. | September 13, 2017 1:00am
Sept. 13--The owner of the Hilton Garden Inn at Suncrest Towne Centre is trying to stave off a public auction of the facility.
A hearing on its motion for a restraining order or injunction to block the sale is set for Thursday, in federal court in Clarksburg.
The auction is set for Sept. 21.
The owner is Fairmont-based Mountain Blue Hotel Group. The case gained notoriety because AA Property, a company jointly owned by Sen. Joe Manchin and former longtime aide and former state Democratic Party chairman Larry Puccio has a 12 percent membership interest in Mountain Blue, according to court documents. Puccio directed the Democratic gubernatorial campaign for now-Republican Gov. Jim Justice.
On Aug. 8, U.S. Bank National Association, trustee for the Morgantown hotel lender, filed suit against Mountain Blue in federal court, alleging that Mountain Blue took out a $15.47 million loan for the hotel.
Mountain Blue failed to pay $255,671.23 in franchise fees and was served a franchise termination notice that is on hold pending an October hearing regarding possible receivership; it accrued $437,878.42 in state tax liens; and it failed to comply with an agreement to repay $150,000 worth of county hotel taxes (the subject of a Monongalia County Circuit Court suit filed Aug. 8).
In its motion filed Friday, Mountain Blue -- managed by William A. Abruzzino, of Florida, who operates a number of businesses out of the same Fairmont address -- contends that it deposited about $400,000 into a cash management account controlled by the plaintiff.
Because of this account and other escrow accounts, Mountain Blue says the collateral and loan were never in jeopardy. In addition, the matter of the delinquent franchise fee has been settled and paid.
Mountain Blue contends that it will suffer irreparable harm though the sale while U.S. Bank will not suffer without the sale because its interests are protected by a deed of trust and it controls all cash flow to Mountain Blue.
As previously reported, Monongalia County Sheriff's Department officials raided the Hilton Garden Inn on Friday morning to seize assets in order to collect on $150,000 in unpaid taxes.
They took cash, checks and other financial information to pay the hotel and motel tax owed to the county.
In August, Monongalia County Circuit Court Judge Susan Tucker ruled in favor and granted judgment to the county in its tax lawsuit against the Hilton Garden Inn for unpaid Business & Occupancy Tax.
A Mountain Blue sister company -- Mountain West Hospitality, in which AA also holds interest -- is also the subject of a federal suit, brought by Deutsche Bank Trust, concerning the Hilton Garden Inn in Clarksburg and the Hampton Inn in Elkins.
Deutsche Bank alleges Mountain West defaulted $17.7 million worth of a $19.6 million loan; failed to pay hotel franchise royalties totaling $399,895; and failed to complete a city tax repayment plan agreement with the city of Clarksburg, $40,000 in arrears (the subject of a circuit court suit filed by Clarksburg in April).
Those hotels went into receivership on Aug. 2.
Manchin reportedly contended that AA's interest in the companies is listed in error, though he declined to comment to The Dominion Post.
Abruzzino also manages Tara Retail Group -- headquartered at the Fairmont office -- which is suing the state Department of Transportation over the bridge destroyed by the June 2016 flood leading to the Crossings Mall in Elkview.
The bridge was rebuilt and the mall reopened in July. Tara wants the DOT to take responsibility for paying the rebuilding costs.
The Fairmont office is also listed as the headquarters for Emerald Coast Hospitality, which owns the LaQuinta Inn and Suites at Crossings Mall. Emerald Coast sought bankruptcy in Georgia in 2012, but the case was dismissed in 2013.