Investors are getting on the Mark
ASHLAND -- A group of Los Angeles investors has filed a reorganizationplan in U.S. Bankruptcy Court in Eugene to renovate and reopen the MarkAntony Hotel next year.
Act Two Ltd., a corporation formed by the investors, would buy the hotelfor $1,175,000, according to the plan.
Act Two has bought a small claim against the hotel's owner, Stand-Corp. of Reno, Nev., which gives it standing to propose a plan in BankruptcyCourt.
Stand- also filed a reorganization plan Friday, proposing to keep thehotel open for two more years while the owner continues to seek a purchaseror investors.
And an Ashland man, Leonard Gotshalk, 48, said that another group ofinvestors from New York was working with Stand- to purchase the hotel.
Bankruptcy Court Judge Albert Radcliffe would review the plans on Wednesday.
The historic hotel at 212 E. Main St. closed this week after the cityof Ashland shut off its power for failure to pay an electric bill. Ashlandofficials said they switched off the power because a $6,600 electric billremained unpaid after two months.
The hotel has been in financial trouble for years. Stand- has soughtprotection from creditors under Chapter 11 of the federal Bankruptcy Act.
Stand- had the exclusive right to offer a reorganization plan for 120days after its original filing on April 23.
When that deadline passed in August, a creditor such as Act Two, couldcome forward with its own plan.
Act Two filed its plan with the court this week.
Eugene attorney Carolyn Wade, who represents Act Two, was out of theoffice on Friday. Her associate, Wilson Bo Muhlheim, said theplan provides a faster, more cost-effective alternative to a Chapter 7 liquidation.
Muhlheim said the Act Two investors don't want the hotel's antique furnishingsand propose that those be sold to help satisfy creditors. They want onlythe building.
They want to gut it and turn it into a first-class operation,he said. I've been involved with two, maybe three bankruptcies ofthe Mark Antony. The problem is, everybody wants to just throw on a newcoat of paint and call that remodeling.
Ashland attorney Thomas Howser, who prepared Act Two's corporation papers,said Muhlheim is the guru of bankruptcy in Oregon. He said theAct Two investors do not wish to be identified at this time.
The clients are interested in seeing that as many local creditorsare paid off so they can get a good start in this community, Howsersaid.
Stand- filed a reorganization plan at 3:22 on Friday afternoon, narrowlybeating a 4:30 deadline.
The Stand- plan proposed keeping the hotel open for two more yearswhile the owners continue to seek a purchaser or investors. If that fails,the hotel would be liquidated.
At 4:25 p.m. Friday, these were the only two plans filed with bankruptcycourt.
But Gotshalk said on Friday that he is working as a middleman betweenStand- President Joe Burkhardt and a group of three or four individualsfrom New York who want to purchase the hotel.
He said that Keith Boyd, a Grants Pass attorney for Stand-, filed areorganization plan Friday that requests time for this New York group toconduct a 60-day market analysis of the hotel.
If the analysis proves the hotel could be profitable, the New York investorswould put up $1.5 million to pay off creditors and then renovate the hotel.
That's the plan, Gotshalk said. To renovate it andopen it as a first-class motel.
He declined to name the investors.
Boyd, reached at home, refused to confirm whether he filed the plan describedby Gotshalk.
Meanwhile, Paul Garrick of the office of the U.S. Bankruptcy Trusteehas filed a motion to dismiss the Chapter 11 or convert it to a Chapter7 liquidation.
A hearing on that motion is scheduled Wednesday. If it is converted toa Chapter 7, reorganization plans will no longer be considered.
Pacific Coast Investment Co., the hotel's second largest creditor afterthe Internal Revenue Service, also filed a motion on Monday to convert ordismiss the Chapter 11 action. The Seattle mortgage company is owed $552,000by Stand-.
The hotel's manager reportedly said when the hotel closed for good onMonday that the owners have no money to pay the attorneys to convert theirbankruptcy to a Chapter 7, said Joan Stevens-Schwenger, a spokeswoman forthe Oregon Bureau of Labor and Industries.
Burkhardt could not be reached for comment.