Vail Plaza Hotel & Club, a luxury resort hotel in trendy Vail, Colorado, has filed for
Chapter 11 bankruptcy.
Waldir Prado, the 78-year-old developer and owner of the hotel, filed for bankruptcy after he was unable to get a loan due to poor credit markets. Under
Chapter 11 bankruptcy, Prado can operate his business while at the same time continue to reorganize his finances without constant harassment from creditors.
Prado looks at the situation as not a problem, but a solution. He said the move is not a cause for concern and that the hotel will continue to operate and function as it always has.
Prado's decision to file for bankruptcy came after negotiations fell through for a three-year construction loan that was up in September. Prado was in the process of negotiating a newer, long-term loan when talks stalled and the economy took a dive, leaving Prado with no way to pay the initial loan.
Prado has 120 days to draft a payment plan, which is expected to include a monthly schedule for paying off the loan over several years. Once the credit markets recover, Prado is confident he will be able to obtain another loan.
Since filing for bankruptcy, Prado has reassured inquirers that the filing has nothing to do with the hotel's finances.
"Vail Plaza is in tremendous shape," he said.
And despite fears that Vail Valley could experience a dip in visitors, Prado said he's anticipating a good season and overall year for the hotel. He said he doesn't expect the high-income patrons that the plaza typically attracts to cut back on their vacations to Vail. Right now the hotel is booked solid over New Year's, is 90 percent full around Christmas, and is more than 50 percent booked throughout the high season.
According to Don Cohen of the Economic Council of Eagle County, filing for
Chapter 11 bankruptcy isn't uncommon, but more of a "business management tool."
"It's not an everyday occurrence, but it's not wholly unusual," said Cohen. "It's definitely an opportunity to buy yourself breathing space and work things out."
To learn more about
Chapter 11 bankruptcy, click here to find a
bankruptcy lawyer near you!