ATLANTA, Ga. – The Acting United States Trustee for Region 21 has filed an emergency motion to dismiss and request for hearing on an expedited basis due to lack of proof of insurance in the bankruptcy filing of Mountain Blue Hotel Group.
Mountain Blue filed for bankruptcy in a federal court in Georgia on Sept. 13. The motion to dismiss was filed Sept. 25.
On demand of the Acting U.S. Trustee, Mountain Blue failed to provide proof that it had insurance on the petition date or that it has since acquired insurance for the real property and its other insurable assets.
Failure to maintain appropriate insurance poses a risk to Mountain Blue’s estate or to the public and constitutes cause for dismissal of its case.
Mountain Blue previously asked for more time to provide its financial information to the court system, noting complications caused by Hurricane Irma.
The day after filing for bankruptcy, the federal clerk filed notice that Mountain Blue’s initial filing was deficient.
Court officials stated they still needed names and addresses of all creditors, a statement of financial affairs, a list of 20 largest unsecured creditors and a list of equity security holders, among other things. They stated that Mountain Blue had until Sept. 27 to produce the information or the case would be dismissed without notice or opportunity for a hearing.
When asking for more time, Mountain Blue noted that William Abruzzino’s business and financial records were in Bonita Springs, Fla.—which he was unable to get to.
Mountain Blue’s attorneys stated that the area suffered major flooding for several days due to Hurricane Irma and that they were only able to get back into the office on Sept. 16 and 17 to begin reconstructing computers and files. They asked for the deadline to be extended until Oct. 9.
The lawsuit filed against Mountain Blue by U.S. Bank last month was stayed on Sept. 13, after the hotel group filed bankruptcy. In that lawsuit, U.S. Bank is suing over a commercial break of contract over a loan of more than $15 million.
The loans and lawsuits over the hotels also include the listing of investor AA Properties, a 50-50 partnership of U.S. Senator Joe Manchin and his longtime aide Larry Puccio. Their representatives have previously stated that their listing was a mistake.
This is the second time Mountain Blue’s hotels have faced bankruptcy. They previously filed for bankruptcy in 2012.
RNC Spokesperson Brett Tubbs said AA Properties was also listed as an investor and creditor in the 2012 case.
“It’s past time for Two-Faced Joe to provide straightforward answers and explain his involvement in the hotel deals,” Tubbs said. “How long can someone claim complete ignorance on any issue that has repeated itself? West Virginians aren’t fooled by Two-Faced Joe’s antics and will remember his lack of transparency come Election Day.”
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.
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.
U.S. Bankruptcy Court for the Northern District of Georgia case number: 17-66051
