One set of partners in the ownership of Bishop’s Lodge has filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Delaware.
The move by the property’s majority owners came against the wishes of its managing member, Richard Holland.
“We did not need to file for bankruptcy,” Holland said in an interview Wednesday.
Holland and his partners own the property on the north side of Santa Fe, and Auberge Resorts Collection operates the resort.
The filing on Monday seeks to restructure $78 million in debt incurred to create the ultra-luxury, 100-room resort that opened in July with rooms typically priced above $1,100 per night. The debtor is officially listed as BL Santa Fe LLC, the company Holland established when he acquired Bishop’s Lodge in 2014 to upgrade the property to a luxury resort.
Holland said the partners own a majority interest in BL Santa Fe and dispute Holland’s claim that he remains managing member.
Holland did not name his partners.
“This whole mess is unfortunate and will be resolved soon,” Holland said.
Holland used similar words in May when a complaint was filed against BL Santa Fe LLC in First District Court asking to put the Bishop’s Lodge property in foreclosure for nonpayment of a $43 million loan from Fortress Credit Co. LLC. Ten days later, the court issued a “notice of excusal.”
Chapter 11 bankruptcy “usually proposes a plan of reorganization to keep (the) business alive and pay creditors over time,” according to the U.S. Courts website.
The bankruptcy is not expected to affect the operations of Bishop’s Lodge, officials said.
Hotel general manager John Volponi said Bishop’s Lodge “most definitely” will remain open.
“Nothing changes for us,” he said. “We continue to operate as we always have. We are very fortunate that it doesn’t affect us.”
Holland’s entity, HRV Santa Fe LLC, is the disputed managing member of BL Santa Fe LLC.
“This filing was separate from me,” Holland said. “It is very complicated and hard to describe and hard to understand.”
Holland said his preference for accessing additional capital differed from his partners’, who insisted on Chapter 11 bankruptcy.
The bankruptcy document states more than 200 creditors, with estimated assets and liabilities each between $50 million and $100 million.
The bankruptcy filing lists the top 20 creditors with unsecured claims being owed $1.55 million. This does not include claims by secured creditors.