The bankrupt Aspen Club & Spa is seeking court approval to borrow another $950,000 so it can remain solvent, keep current on its insurance policy payments and chip away at its debts owed to subcontractors.
On Thursday, a bankruptcy judge set a Friday hearing date regarding Aspen Club’s motion seeking more money in financing as part of its exit strategy from Chapter 11 bankruptcy, a measure both it and one of its associated entities declared in May.
A June 24 order of the Bankruptcy Court allowed the club to borrow as much as $4.2 million from Florida-based EFO Financial Group to maintain its most pressing business commitments, such as keeping its insurance policy active, as it attempts to reorganize its debts to creditors and resume construction on its major redevelopment project.
Now the club wants nearly another $1 million to pay its carrier for real estate insurance coverage through June, according to a Dec. 5 motion signed by attorney John Young of Markus Williams Young & Hunsicker LLP, a Denver law firm representing The Aspen Club in the bankruptcy proceedings.
The motion also seeks permission for the club to borrow another $90,000 to go toward what is owed to mechanics’ liens claimants “to cover time, costs and expenses of updating bids to complete the Aspen Club project,” the motion says.
Next week’s hearing on the matter comes as The Aspen Club, which has cited having more than $100 million in debt, continues its battle with its top lenders over moving forward.
Ultimately, the club hopes it can borrow another $140 million to emerge from bankruptcy, but two loan-note holders — GPIF Aspen Club and Revere High Yield Fund — filed court motions Dec. 6 objecting to the loan from Florida-based EFO Financial Group LLC. Their motions not only question the feasibility of Aspen Club’s reorganization plan, but one motion says the terms of the loan provide free lifetime Aspen Club memberships to EFO officials and their relatives and gives them complimentary stays at an Aspen lodge, among other questionable dealings.
“These kickbacks to EFO’s principals (and their families, and their friends, and the guests at their other hotel property) are unseemly and improper and the fact that the debtors (The Aspen Club) have agreed to them is illustrative of the bad faith behind the filing of this amended plan,” said a motion from GPIF Aspen Club.
Construction on The Aspen Club’s redevelopment project at 1340 Ute Ave. stopped in September 2017 when construction firms left the job because they had not been paid. The project started in the spring of 2017 and currently sits incomplete. Plans had called for a remodel of the 40,000-square-foot Aspen Club & Spa building, the construction of a 54,000-square-foot lodge with 20 timeshares, and 12 multi-family affordable-housing units.