Owners of the Linden Hill Hotel in Bethesda are trying to sell the property quickly so they can avoid having the hotel taken over by the bank that holds the mortgage.
The partnership that owns the 344-room hotel and tennis complex has defaulted on loans to Chase Manhattan Bank, and the bank had planned to hold a foreclosure auction last week.
But on the day the property was to be auctioned, the partnership got a reprieve when three of their creditors filed a petition for involuntary bankruptcy against them in U.S. Bankruptcy Court in Rockville. A Chase spokesman declined to specify the amount of the loans.
The effect of the creditors' petition was to put a hold on the foreclosure proceedings, giving the owners more time to sell the hotel.
In the meantime, the hotel, restaurant and indoor tennis complex is continuing to operate as usual, one of the partners said.
The top officers of Mardeck Ltd., a hotel management firm that runs a number of Holiday Inns in this area, formed the partnership that bought the Linden Hill Hotel in 1980. The mid-rise hotel, at a prime location near Wisconsin Avenue and the Capital Beltway on Pooks Hill Road, has been in the process of extensive renovation.
But Mardeck chief executive Ralph H. Deckelbaum said the project was hit by high interest rates and the lack of long-term financing.
The owners are negotiating to sell the hotel, and an agreement may be completed in a few weeks, Deckelbaum said. The owners now probably have a few months in which to sell the property.
By giving the owners more time to sell, the bankruptcy court petition also gave the unsecured creditors a better chance of getting their money back, explained David S. Musgrave, a lawyer for one of the creditors. If the lender foreclosed on the property, there would be nothing left for unsecured creditors.
By coincidence, Chase Manhattan this month took over the hotel's next-door neighbor, the Promenade cooperative apartments, after developer American Invsco defaulted on loans there.