CHICAGO The new owner of Chicago’s Allerton Hotel has filed for bankruptcy, for now staving off an attempted foreclosure by senior lender DiamondRock Hospitality Co.
ALT Hotel LLC says operations are continuing as normal at the 443-key Prohibition Era icon, famous for its Tip Top Tap lounge. ALT is an affiliate of New York-based hedge fund manager Petra Capital Management LLC, which took control of the property last year.
The bankruptcy filing claims the hotel has assets worth between US$100 million and US$500 million, and liabilities between US$50 million and US$100 million.
“This filing is designed to protect against hostile predatory actions by one secured creditor that could have gravely adverse consequences for the hotel, its employees, other creditors and vendors,” says attorney Neal Wolf, who is representing the hotel. Wolf is referring to DiamondRock, which bought the Allerton loan at a discount last year. Wolf tells Chicago Tribune that DiamondRock holds about US$69 million of debt.