Bloomberg is reporting that The Grand Wailea Resort Hotel & Spa in Hawaii and four other luxury resorts filed for bankruptcy after lenders seized them from Morgan Stanley’s real estate funds.
The five resorts had $2.2 billion in assets and $1.9 billion in debt as of November 30, according to Chapter 11 papers filed today in U.S. Bankruptcy Court in Manhattan. The lending group, which consists of Paulson, Winthrop Realty Trust and Capital Trust Inc., said it will restructure the debt and keep the hotels operating to take advantage of a predicted turnaround in the luxury market.
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