The Pad is a hybrid hotel and hostel at 491 Rainbow Drive in Silverthorne. (Courtesy of The Pad/David Lauer)
A $20 million hotel-hostel in Silverthorne is underwater and cannot survive, its lender says.
The Pad, at 491 Rainbow Drive, filed for Chapter 11 bankruptcy early this month. It reported owing $16.7 million to creditors, including $12.3 million to BRMK Lending in Seattle.
“In light of everything,” co-owner Lynne Baer said then, “we are hoping for a positive outcome.”
But BRMK said that The Pad’s figures are off by millions of dollars. The lender is actually owed $17.8 million, it has told the U.S. Bankruptcy Court. That puts The Pad’s debt at $21.2 million, or north of the $20.3 million that Baer and her husband say the hotel/hostel is worth.
In a recent court filing, BRMK claims there is no equity in The Pad and no benefit to letting it reorganize and stay in business under a Chapter 11 bankruptcy. The Pad “cannot generate (enough) positive net income to sufficiently fund a Chapter 11 plan,” BRMK alleges.
In its initial bankruptcy filing, The Pad reported $2.1 million in revenue last year and $1.9 million in the first nine months of this year. By comparison, BRMK said that the amount it is owed increases $13,316 every day due to interest and default, or $4.9 million per year.
BRMK doesn’t believe the hostel should be sold off — something that its owners say they are also opposed to — because a sale wouldn’t pay off its debts, according to BRMK.
One of the shared bunkrooms inside The Pad, a hotel and hostel in Silverthorne. (BusinessDen file)
Instead, the lender is asking U.S. Bankruptcy Judge Joseph Rosania Jr. to let BRMK take The Pad through a foreclosure. That, too, would ensure that most creditors are not paid back, but would give BRMK a property that its own appraisers value at $20.3 million.
Rosania will hear arguments from BRMK, The Pad and others at a Nov. 7 hearing, then decide its future after that. In the meantime, a receiver is operating The Pad.
BRMK’s lawyer is Peter Murphy of Markus Williams Young & Hunsicker in Denver.
The Pad is represented by Jonathan Dickey and Keri Riley with Kutner Brinen Dickey Riley, also in Denver. They declined to comment on BRMK’s request to foreclose but said they will file a response with the court in the next week to “address all of the allegations made.”
Meanwhile, a judge in Breckenridge has ordered The Pad to pay $51,500 to Kevin Bowen, a former manager who says he was paid only $150,000 of his $195,000 severance. Judge Reed Owens issued the judgment Oct. 11 after The Pad didn’t respond to the lawsuit.
The Pad is a hybrid hotel and hostel at 491 Rainbow Drive in Silverthorne. (Courtesy of The Pad/David Lauer)
A $20 million hotel-hostel in Silverthorne is underwater and cannot survive, its lender says.
The Pad, at 491 Rainbow Drive, filed for Chapter 11 bankruptcy early this month. It reported owing $16.7 million to creditors, including $12.3 million to BRMK Lending in Seattle.
“In light of everything,” co-owner Lynne Baer said then, “we are hoping for a positive outcome.”
But BRMK said that The Pad’s figures are off by millions of dollars. The lender is actually owed $17.8 million, it has told the U.S. Bankruptcy Court. That puts The Pad’s debt at $21.2 million, or north of the $20.3 million that Baer and her husband say the hotel/hostel is worth.
In a recent court filing, BRMK claims there is no equity in The Pad and no benefit to letting it reorganize and stay in business under a Chapter 11 bankruptcy. The Pad “cannot generate (enough) positive net income to sufficiently fund a Chapter 11 plan,” BRMK alleges.
In its initial bankruptcy filing, The Pad reported $2.1 million in revenue last year and $1.9 million in the first nine months of this year. By comparison, BRMK said that the amount it is owed increases $13,316 every day due to interest and default, or $4.9 million per year.
BRMK doesn’t believe the hostel should be sold off — something that its owners say they are also opposed to — because a sale wouldn’t pay off its debts, according to BRMK.
One of the shared bunkrooms inside The Pad, a hotel and hostel in Silverthorne. (BusinessDen file)
Instead, the lender is asking U.S. Bankruptcy Judge Joseph Rosania Jr. to let BRMK take The Pad through a foreclosure. That, too, would ensure that most creditors are not paid back, but would give BRMK a property that its own appraisers value at $20.3 million.
Rosania will hear arguments from BRMK, The Pad and others at a Nov. 7 hearing, then decide its future after that. In the meantime, a receiver is operating The Pad.
BRMK’s lawyer is Peter Murphy of Markus Williams Young & Hunsicker in Denver.
The Pad is represented by Jonathan Dickey and Keri Riley with Kutner Brinen Dickey Riley, also in Denver. They declined to comment on BRMK’s request to foreclose but said they will file a response with the court in the next week to “address all of the allegations made.”
Meanwhile, a judge in Breckenridge has ordered The Pad to pay $51,500 to Kevin Bowen, a former manager who says he was paid only $150,000 of his $195,000 severance. Judge Reed Owens issued the judgment Oct. 11 after The Pad didn’t respond to the lawsuit.
