CHARLESTON – U.S. Bank National Association has filed a motion to dismiss a bankruptcy case involving Mountain Blue Hotel Group unless the owner can prove that all of its investors agreed to the bankruptcy.
The lender submitted the original articles of organization and operating agreement for Mountain Blue from 2013 on Dec. 6 in the U.S. Bankruptcy Court for the Middle District of Florida. It also filed its motion to dismiss on that day.
“As established by its own initial filings in this case, debtor…does not have authority to proceed in bankruptcy as it failed to adhere to its own corporate formalities and obtain proper corporate authority to commence this bankruptcy case,” the motion states.
The petition for bankruptcy must be approved unanimously by written resolution of all debtors’ members and an independent director from certain national placement agencies must approve the bankruptcy filing, according to the motion.
The lender claims Mountain Blue failed to satisfy those conditions.
“Debtor has not provided any evidence of a resolution authorizing the bankruptcy filing,” the motion states. “Debtor’s petition is signed by William Abruzzino ‘under penalty of perjury’ in his capacity as ‘managing member’ of the debtor.”
Tara Hotel Management is the manager of the debtor and Abruzzino has no authority to place the debtor into a chapter 11 bankruptcy proceeding under the debtor’s own corporate governance documents.
The operating agreement list the contributors as: William A. Abruzzino; Rebecca A. Abruzzino; Martha Hughes, individually and has trustee of the William A. Abruzzino and Rebecca A. Abruzzino General Skipping Trust; Judy Nunnally; Jaron Smalley; AA Property; Peachtree Village Partners; Rebecca A. Abruzzino, as trustee of the Robert A. Abruzzino Irrevocable Trust; and Mark A. Abruzzino. It lists Tara Hotel Management as manager.
A preliminary hearing has been set for Dec. 19 at 3:30 p.m.
The lender claims Mountain Blue, which ran the Hilton Garden Inn in Morgantown, defaulted on a $15 million loan. It filed suit against Mountain Blue in federal court in West Virginia in August. Mountain Blue then filed for bankruptcy in Georgia, which was dismissed, and then in Florida.
West Virginia’s State Tax Department has filed a motion asking for the bankruptcy district to be moved to West Virginia.
The state claims Mountain Blue owes $587,000 in taxes that were collected from customers and then not passed on over the last several years.
U.S. Bankruptcy Court for the Middle District of Florida case number: 9:17-bk-09667