CHARLESTON – The owners of Mountain Blue Hotel Group re-filed for bankruptcy in Florida after their case in Georgia was denied.

An order was filed on Nov. 15 in the Georgia case denying a motion to reconsider the Chapter 11 bankruptcy case, after a hearing was held the previous day.

That same day, the owners filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Middle District of Florida.

Last month, U.S. District Judge Lisa Ritchey Craig dismissed the case when Mountain Blue failed to meet a deadline to provide evidence of workers’ compensation insurance. Mountain Blue filed a motion to reconsider.

Craig’s order from last month put the dispute back in federal court, where Mountain Blue and U.S. National Bank Association have been going back and forth over control of the Hilton Garden Inn in Morgantown.

On Oct. 18, U.S. District Judge Irene Keeley granted the lender’s request for a receiver to be appointed for the hotel.

In August, U.S. National Bank Association filed the lawsuit against Mountain Blue, alleging it lent Mountain Blue $15,470,000 on Sept. 7, 2013. The loan was secured by the Hilton Garden Inn in Morgantown.

The lender 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.

The lender claims Mountain Blue defaulted on the loan and owes the principal balance of $14,559,226.84.

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. 

In July, 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. Bankruptcy Court for the Middle District of Florida case number: 9:17-bk-09667

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