CLARKSBURG – A hotel partly owned by Sen. Joe Manchin is being sued by U.S. Bank National Association for defaulting on a loan of more than $15 million.
U.S. Bank National Association is trustee for the benefit of the Holders of Comm 2013-CCRE12 Mortgage Trust Commercial Mortgage Pass-Through Certificates.
This is a commercial breach of contract that relates to the lender’s loan to the borrower, which is secured by a Hilton Garden Inn located in Morgantown, according to a complaint filed Aug. 8 in the U.S. District Court for the Northern District of West Virginia.
USBNA claims it filed the lawsuit because default occurred and the property value is at risk.
The bank lent Mountain Blue Hotel Group $15,470,000 on Sept. 7, 2013. The loan was secured by the Hilton Garden Inn in Morgantown.
The complaint identifies members of Mountain Blue as William A. Abruzzino; Rebecca A. Abruzzino; Martha Hughes; Martha Hughes as trustee of the William A. Abruzzino and Rebecca A. Abruzzino Generation Skipping Trust; Judy Nunnally; Jaron Smalley; AA Property LLC; Peachtree Village Partners LLC; Rebecca A. Abruzzino as trustee of the Robert A. Abruzzino Irrevocable Trust; and Mark A. Abruzzino.
AA Property is owned by Larry Puccio and Sen. Joe Manchin.
USBNA claims it advanced Mountain Blue the more than $236,600 needed to pay the property's franchise fee after Hilton threatened to terminate the agreement in May for non-payment. It also advanced more than $350,000 to cover the hotel's operating expenses in June and July.
The state has also filed a lien against the property for $437,878 in back taxes, and Monongalia County commissioners are suing over $150,000 in unpaid hotel taxes, according to the suit.
“Lender is not certain if the Property’s rents are being used to pay expenses of the property," the complaint states. "For example, franchise fees and taxes were included in the budget and were clearly not paid. Absent the appointment of a receiver, there is no assurance that the property’s rents or any lender advances will be properly applied to expenses of the property."
USBNA claims it has projected a cash shortfall of $158,362.32 for 2017.
Despite its repeated requests, the defendants have not provided actual financial statements or information regarding actual income and expenses of the property or what it has done with the recent advances from the plaintiff, as required by the loan documents, according to the suit.
USBNA claims Mountain Blue has defaulted on it loan and owes the principal balance of $14,559,226.84.
USBNA is seeking a money judgment in the amount of $14,559,226.84 with interest; and the appointment of a receiver over the property. It is being represented by Christopher P. Schuelle and Timothy P. Palmer of Buchanan Ingersoll & Rooney.
The case is assigned to District Judge Irene Keeley.
Earlier this year, a lawsuit was filed against Mountain Blue by the Monongalia County Commission for refusal to pay a hotel tax.
Mountain Blue owed $148,002.01 for the period of November 2015 to June 2016, but failed and refused to abide by the agreement that they executed to pay the hotel tax.
Last month, a motion for default judgment was filed in Monongalia Circuit Court in that suit, claiming that no answer or other defense was ever filed by the defendants. The motion was seeking for judgment in favor of the plaintiffs.
U.S. District Court for the Northern District of West Virginia case number: 1:17-cv-00138