Jan. 20, 2012--Wells Fargo Bank has been rebuffed by a 4th Judicial District judge on its request for a receiver for the Crowne Plaza hotel, the second-largest hotel in the Colorado Springs area, after its owners defaulted in July on a $30.8 million mortgage on the property.

Fourth Judicial District Judge Gregory Werner denied the bank's request because it had failed to show that either owner, Stamford Real Estate (Colorado Springs) LLC or Harrell Colorado Operating Co. LLC, had been served with the lawsuit seeking the receiver. Werner ruled that Wells Fargo must reapply for appointment of the receiver after it can show both defendants have been served and had the chance to answer the suit.

Wells, trustee of the CWCapital Cobalt II Trust that now holds the loan, asked Jan. 11 that David Buddemeyer, president of North Palm Beach, Fla.-based Driftwood Hospitality Management LLC, be appointed receiver for the property. A receiver is appointed by a court to take control and manage a property, seizing its bank accounts and having the authority to hire and fire employees and execute contracts.

The bank's suit alleges that Stamford and Harrell took out the mortgage in 2007 when they bought the 500-room hotel in 2007, but failed to repay it when due July 9 and still owes the trust $28.8 million. Although Stamford and Harrel bought the hotel for $20.2 million, the El Paso County Assessor's Office currently values to property at $9.3 million.

Officials from Driftwood declined comment, while officials from Harrell did not return a telephone call seeking comment.

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