{"id":2454179,"date":"2020-02-06T00:00:00","date_gmt":"2020-02-06T07:00:00","guid":{"rendered":"https:\/\/www.aspentimes.com\/?p=320405"},"modified":"2020-02-06T00:00:00","modified_gmt":"2020-02-06T07:00:00","slug":"colorado-bankers-association-opposes-aspen-club-bankruptcy-exit-plan","status":"publish","type":"post","link":"https:\/\/alwaysmountaintime.com\/kspn\/local-news\/colorado-bankers-association-opposes-aspen-club-bankruptcy-exit-plan\/","title":{"rendered":"Colorado Bankers Association opposes Aspen Club bankruptcy exit plan"},"content":{"rendered":"
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The Aspen Club & Spa\u2019s plan to emerge from Chapter 11 bankruptcy by obtaining $140 million in exit financing is drawing opposition from the Colorado Bankers Association, which represents more than 95% of all banks in the state.<\/p>\n

In a filing made Jan. 24, the Bankers Association claimed a precedent will be set to the detriment of commercial lenders and borrowers if the bankruptcy court blesses the fitness club\u2019s request for the funding to satisfy $26.8 million in mechanics\u2019 liens and resume construction on its delayed redevelopment project.<\/p>\n

The Aspen Club & Spa\u2019s legal team responded Tuesday with its own brief claiming the CBA\u2019s argument \u2014 which it made in the form of an amicus curiae, or friend-of-the-court brief \u2014 is unripe because it is based on conclusions the bankruptcy judge overseeing its case has yet to approve the exit loan proposal.<\/p>\n

The CBA\u2019s brief, in the meantime, argued The Aspen Club\u2019s reorganization plan will potentially damage creditors who have existing secured loans on its property at 1450 Ute Ave., while setting a precedent that could impact commercial lenders industry-wide.<\/p>\n

\u201cThey view this as a threat to secured lending, which not only hurts the banking industry that the CBA represents, but can ultimately hurt other borrowers as well,\u201d attorney Cynthia Lowery-Graber of the Denver branch of St. Louis, Missouri-based Bryan Cave Leighton Paisner LLP, which is representing the CBA in its court action, said Wednesday.<\/p>\n

That\u2019s because under The Aspen Club\u2019s reorganization plan, the exit-lender would hurdle other creditors with collateral, an action known in legal speak as \u201cpriming liens.\u201d Such a measure \u201ccompromises the basic concept that a secured lender\u2019s lien will survive a bankruptcy filing,\u201d the amicus brief argued.<\/p>\n

\u201cWhat will happen is the cost of lending will go up,\u201d Lowery-Graber said in a phone interview.<\/p>\n

She added financial institutions will be less prone to extend credit while the price of credit will increase when \u201ca lender deems the customer to have any risks at all and they are concerned about another creditor coming in and taking over (in a bankruptcy case) and having more of a secured interest or high-level in priority interest.\u201d<\/p>\n

While the CBA is not a party to the bankruptcy case, it is supporting the position of a major creditor opposed to The Aspen Club\u2019s reorganization plan, which hinges on both creditor approval and the pending nine-figure financing deal with Florida-based lender EFO Financial.<\/p>\n

That creditor is GPIF Aspen, a limited liability corporation that formed in December 2017. That same month FirstBank, the provider of a $30 million construction loan to The Aspen Club in May 2016, conveyed the deed of trust on the property to GPIF Aspen after the club defaulted on the loan.<\/p>\n

GPIF Aspen\u2019s acquisition of the loan note came after The Aspen Club, in September 2017, halted construction on its redevelopment project after workers walked off the job because they had not been paid. The project, initially scheduled to be completed in 2018, remains on hold.<\/p>\n

In May, Aspen Club & Spa and The Aspen Club Redevelopment Co. declared bankruptcy, their cases having since been jointly administered through the bankruptcy court.<\/p>\n

GPIF Aspen has a claim for $34.1 million against The Aspen Club, which has said the amount exceeds the actual debt by about $2 million.<\/p>\n

Whatever the case, the two sides have found little common ground in the dispute.<\/p>\n

A pleading introduced Tuesday by Aspen Club attorneys argued the CBA\u2019s amicus brief is inadmissable because in addition to it duplicating arguments already made by GPIF Aspen and further muddying the legal waters, the lobbying organization is more concerned about the \u201cpotential negative impact\u201d of Aspen Club\u2019s plan on \u201cthe business interest of (CBA\u2019s) members.\u201d<\/p>\n

\u201cWhile the CBA\u2019s concern for the credit and lending markets is admirable, this appeal is not the place to suggest rewriting or reinterpreting the Bankruptcy Code \u2026 to achieve the preferred result of CBA\u2019s members,\u201d argued the response filed by the firm Markus Williams Young & Hunsicker LLC of Denver.<\/p>\n

The debate is playing out before the U.S. Bankruptcy Appellate Panel of the 10th Circuit, which is where GPIF Aspen is appealing a decision made in November by U.S. Bankruptcy Court Judge Joseph Rosania Jr., who is presiding over The Aspen Club\u2019s Chapter 11 case in Denver.<\/p>\n

Filed by attorney Jason Cohen of the Houston firm Bracewell LLP, GPIF Aspen\u2019s appeal is seeking the reversal of Rosania Jr.\u2019s decision<\/a> to not allow GPIF Aspen to file a competing reorganization plan during what is called an \u201cexclusivity period\u201d for the club.<\/p>\n

\u201cGPIF is not in this case for the interest on the loan,\u201d the judge said at the time he made his ruling. \u201cIt\u2019s in the case to get the property. So it\u2019s a play.\u201d<\/p>\n

Rosania Jr. also has not yet ruled on whether GPIF Aspen will receive the $140 million in financing, something The Aspen Club\u2019s attorneys touched upon in their filing this week.<\/p>\n

\u201cThe CBA\u2019s arguments are based on the premise that the Bankruptcy Court has already \u2018endorsed\u2019 or \u2018sanctioned\u2019 (The Aspen Club & Spa\u2019s) proposed exit financing and their chapter 11 plan,\u201d their filing said.<\/p>\n

Based on testimony from a previous hearing concerning Aspen Club\u2019s proposed exit financing, the bankruptcy court determined the Aspen Club\u2019s real property has a market value between $90 million and $100 million.<\/p>\n

Other creditors in the case include Revere High Yield Fund, which has a secured claim of $12.3 million. Another $35 million in claims are spread among secured and unsecured creditors.<\/p>\n

The Aspen Club\u2019s bankruptcy case is being watched closely by financial institutions in Colorado, Lowery-Graber said.<\/p>\n

\u201cI do believe other banking organizations that represent lending institutions are actively monitoring this situation,\u201d she said. \u201cAnd it\u2019s important to note that this decision could have impacts across the country if other courts are to follow this bankruptcy court\u2019s ruling on this.\u201d<\/p>\n

rcarroll@aspentimes.com<\/a><\/p>\n

via:: The Aspen Times<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Aspen Club & Spa\u2019s plan to emerge from Chapter 11 bankruptcy by obtaining $140 million in exit financing is drawing opposition from the Colorado Bankers Association, which represents more than 95% of all banks in the state. In a filing made Jan. 24, the Bankers Association claimed a precedent will be set to the […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[49],"tags":[],"class_list":["post-2454179","post","type-post","status-publish","format-standard","category-local-news"],"acf":[],"publishpress_future_action":{"enabled":false,"date":"2026-08-18 17:07:31","action":"change-status","newStatus":"draft","terms":[],"taxonomy":"category","extraData":[]},"publishpress_future_workflow_manual_trigger":{"enabledWorkflows":[]},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"KSPN The Valley's Quality Rock","distributor_original_site_url":"https:\/\/alwaysmountaintime.com\/kspn","push-errors":false,"_links":{"self":[{"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/posts\/2454179","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/comments?post=2454179"}],"version-history":[{"count":0,"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/posts\/2454179\/revisions"}],"wp:attachment":[{"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/media?parent=2454179"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/categories?post=2454179"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/tags?post=2454179"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}