NEW YORK CITY Alexico Group has lost control of two Manhattan luxury boutique hotels, with a New York state judge ruling that the firm’s principals missed debt payments while paying themselves hefty management fees.
A receiver has been appointed for Flatotel and Alex Hotel, The Wall Street Journal reports. Judge Joan Madden found that Alexico’s principals, Izak Senbahar and Simon Elias, paid themselves US$570,000 in management fees even as Alexico missed two years’ worth of mortgage payments and real estate taxes.
Overall, Alexico transferred US$3.4 million from hotel funds to affiliated properties and themselves in management fees, the ruling states. A group of creditors—Atlas Capital Group, Rockpoint Group and Procaccianti Group—that purchased debt on the two hotels claimed that Alexico was required to pay debt service and taxes, and that it was not entitled to transfer money from the hotels to other properties.
Flatotel and Alex lost a combined US$20 million during the past two years, even without paying loans or real-estate taxes, according to creditors’ court papers. The creditor group claims it is owed a combined US$316 million from the two hotels, including principal and missed interest payments.
The developers also own the luxury Mark Hotel on Manhattan’s Upper East Side.