Paulson-Led Group to Sell Hotels to End Their Bankruptcy

A group led by Paulson & Co. plans to sell the Arizona Biltmore resort and the Claremont Hotel Club & Spa in Berkeley, California, as part of an effort to bring the properties and two other hotels out of bankruptcy. Paulson, a New York-based hedge fund, and co-investor Winthrop Realty Trust (FUR) are marketing the Arizona Biltmore in Phoenix with a opening price of $425 million, and the 279-room Claremont Hotel starting at $80 million, according to two people familiar with the plans, who asked not to be identified because the marketing details are private. The Paulson group placed the hotels and three others in bankruptcy last year after seizing them in a foreclosure auction. Two of the properties, Grand Wailea in Hawaii and La Quinta Resort & Club in California, may also be sold as the group seeks to remove the resorts from bankruptcy, said Michael Ashner, chief executive officer of Boston-based Winthrop. “We are at a point in the process in which we are considering a reorganization in which we would retain ownership of the Grand Wailea and La Quinta, or an alternative approach in which we would sell the Grand Wailea and La Quinta and bid as a stalking horse,” Ashner said in a telephone interview. Should the group decide to sell Grand Wailea and La Quinta Resort, Paulson, Winthrop and co-investor Capital Trust Inc. (CT) would serve as a so-called stalking horse by making the opening bid at auction. The group may also choose to retain ownership of the two properties and restructure their debt as a way to take advantage of an expected turnaround in the luxury lodging market, Ashner said.

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