:
US: The owners of the Hotel Felix in Chicago have been hit with a $54 million foreclosure suit.
According to local reports, the hotel’s owners, a joint venture of Chicago-based developers Oxford Capital Group and Gettys Group, defaulted on a $47 million loan on the 225-room River North property. A foreclosure lawsuit was filed on June 29 in Cook County Circuit Court.
The hotel’s owners haven’t made their scheduled loan payments on the hotel since February and owe $51.4 million as of July 1, including interest and other charges, according to the complaint. A division of Deutsche Bank oversees the loan on behalf of investors in commercial mortgage-backed securities.
The lawsuit comes four months after a servicer appointed to monitor the loan reported that the hotel owners faced a “critical cash flow crunch” due to falling performance.
Oxford president and CEO John Rutledge said the owners were “in advanced negotiations to finalise a friendly amendment”.
The lawsuit, meanwhile, starts the process of the lender taking over the hotel if the two sides can’t reach a deal. The Deutsche Bank venture also asked the court to appoint a receiver for the property. Lawyer David Neff of Perkins Coie, which represents the lender, confirmed that negotiations are ongoing.
