One of the shared bunkrooms inside The Pad, a hotel and hostel in Silverthorne. (BusinessDen file)
The State of Colorado said a hotel-hostel in Silverthorne that is deeply in debt and hasn’t been paying taxes should not be allowed to hide behind bankruptcy laws any longer.
The Pad, a hybrid hotel and hostel that opened in 2021, went bankrupt in October 2023. In an interview then, owners Lynne and Rob Baer blamed “a very hard lending market” and higher-than-expected construction costs for the Chapter 11 bankruptcy.
Now, the Colorado Department of Revenue has said that bankruptcy case should come to a close and a lender should be allowed to take the property through foreclosure.
The Pad’s largest creditor is BRMK Lending, of Seattle, which loaned it nearly $13 million and is now owed more than $17 million. At BRMK’s request, The Pad was run by a receiver when it filed for bankruptcy, until the Baers reached an agreement with BRMK in December.
Under that agreement, the Baers regained control of their hotel but agreed to pay all taxes on time and agreed to pay BRMK $12.3 million by May 26. The Department of Revenue said the Baers have broken that first promise and will soon break the second.
The Pad is a hybrid hotel and hostel at 491 Rainbow Dr. in Silverthorne. (Courtesy of The Pad/David Lauer)
The Pad owes $200,000 in trust fund taxes and $62,000 in sales taxes, the state agency said. Meanwhile, it has no plan for reorganizing and paying off its debts and hasn’t been filing monthly operating reports as required, “providing no transparency for creditors,” CDOR said.
“The combination of failing to pay taxes, failure to file monthly operating reports and inability to effectuate a viable plan establish cause for dismissal of this case,” it wrote May 3.
Rob Baer said that he and his wife are working to resolve the problems that CDOR noted.
“We had some issues with partial monthly sales tax reporting and payment by the receiver when they were in place, and the turnover from them has left some gaps and questions we are just now getting sorted out,” he said in an email Tuesday. “This filing has upped the sense of urgency and all taxes have now been filed and payment is being figured out through the DOR.”
The Baers must now respond to those claims in court. If U.S. Bankruptcy Judge Joseph Rosania Jr. sides with the state, BRMK could acquire The Pad. If he does not, The Pad will remain protected by bankruptcy as the Baers try to reorganize their business.
The Pad’s bankruptcy lawyers are Keri Riley and Jon Dickey with Kutner Brinen Dickey Riley in Denver. DOR is represented by Assistant Attorney General Deanna Westfall.
