|By Thomas J. Prohaska, The Buffalo News,
N.Y.McClatchy-Tribune Regional News
Feb. 28, 2011--LOCKPORT -- State Supreme Court Justice Richard C. Kloch Sr. last week urged the owners of the Barton Hill Hotel to file for bankruptcy, but their attorneys said they are working to prevent that by having a major hotel operator buy into the Lewiston facility.
In a court appearance last week, Kloch rejected a request from Iddleson Group, holder of a delinquent mortgage on the 72- room hotel, to place the hotel in receivership.
A receiver would have collected all the hotel's revenues and sent them to Iddleson, after keeping a share for himself.
Kloch said the Barton Hill needs "reorganization," and he pointed out that he could force the hotel into bankruptcy by signing a foreclosure order.
He invited Justin W. Gray, attorney for the Iddleson Group, to submit such an order. "It's not going to be long," Gray replied.
If Kloch signed that order, the only way to prevent Iddleson from seizing the hotel would be for the Barton Hill to file for Chapter 11 bankruptcy protection.
Also, the hotel owes $43,025 in back taxes and has been placed on Niagara County's tax foreclosure list. A Chapter 11 filing would prevent the county from taking title and auctioning off the hotel.
"We've retained Chapter 11 counsel," said Corey J. Hogan, the hotel's attorney. "Well, do it, man," Kloch shot back.
In addition to the back taxes, the hotel owes the county $67,178 in delinquent payments in lieu of taxes. The Niagara County Legislature voted Feb. 1 to authorize a lawsuit against the hotel to try to collect; the suit was filed Tuesday in State Supreme Court.
Hogan said the hotel owners, Edward and Diane Finkbeiner, intend to pay most of what they owe the county by May 15. He said they are "two people who are trying to do something good for Niagara County."
The Finkbeiners owe Iddleson, which acquired the mortgage from CIT Lending Services, more than $9 million, including interest and late fees. Hogan said the Finkbeiners are negotiating with American Property Management Corp., a San Diego company that owns or operates about 30 hotels.
Hogan said the hotel's business has been improving, pointing out that January receipts were up by 30 percent from January 2010.
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