A Connecticut investment syndicator representing 31 investors in the Columbia Hilton Inn in Howard County has filed a petition in U.S. Bankruptcy Court in Rockville to declare the hotel's managing partners bankrupt, according to court papers.
The petition is one of the latest in a string of financial problems that have dogged the Columbia Hilton since it became the second luxury hotel to open its doors in the fast-growing town of Columbia in 1982.
The syndication firm, Danseke & Co., of Stamford, Conn., has asked the court to place Twin Knolls Associates, the limited partnership that owns the hotel, in involuntary bankruptcy under Chapter 11 of the federal bankruptcy code.
Nelson C. Cohen, a lawyer representing Twin Knolls, declined to comment on the petition. But according to court papers, the inn's managing partners, Anthony Souza and his father, Raymond W. Souza Sr., intend to fight the firm's claim.
A hearing has been scheduled on the matter for April 2.
The 152-unit inn, located at Routes 29 and 175 in Columbia, includes a 100-seat cocktail lounge, a 120-seat restaurant, a banquet hall and meeting rooms and is valued at about $10 million. It was scheduled to be sold at public auction last month as part of a foreclosure suit that had been filed by the Union Mutual Life Insurance Co. of Portland, Maine.
The company claimed that Twin Knolls had defaulted on a $5.5 million loan, but the sale was postponed after the Danseke group initiated the bankruptcy proceeding.
The syndication firm claims in court papers that it was forced to pay $31,265 to the inn's accounting firm to obtain financial information so its clients could file tax returns. The debt is the basis for the petition.
The hotel was saved from the auction block last May when the Souzas made 11th-hour arrangements to raise $2.2 million. The deal fell through shortly afterward, however, and precipitated the latest crisis.
Souza could not be reached for comment this week, but said previously that the hotel's financial woes were related to cash-flow problems and a long-running dispute with the Connecticut syndication firm over hotel expenses.
Souza said he would fight any attempt to auction the hotel even if it meant filing for bankruptcy. According to court papers, Twin Knolls was preparing to seek relief under Chapter 11, when the investment group filed its petition.