FOLEY SQUARE, N.Y.– A federal lawsuit has been filed in New York alleging Developer William Abruzzino is personally responsible for nearly $19 million in a defaulting hotel in Morgantown.
The lawsuit was filed by COMM 2013-CCRE12 Suncrest Towne Center Drive LLC against Abruzzino and Rebecca A. Abruzzino in the U.S. District Court for the Southern District of New York on Feb. 2.
The Abruzzinos owe $18,822,851.95, according to the suit.
On Sept. 17, 2013, UBS Real Estate Securities made a loan in the original amount of $15,470 to Mountian Blue Hotel Group.
On Sept. 13, Mountain Blue filed for Chapter 11 bankruptcy in Georgia, which was dismissed.
Mountain Blue then filed for Chapter 11 bankruptcy on Nov. 15 in Florida.
The bankruptcy cases constitute “springing recourse events under the guaranty,” according to the suit, and have triggered the guarantors’ liability under the guaranty for the entire debt.
The plaintiff claims the Abruzzinos are personally responsible for the loan and that they breached their written guaranty.
The plaintiff is seeking the nearly $19 million amount, along with costs and expenses. It is being represented by Kevin P. Potere, Elinor H. Murarova and Meagen E. Leary of Duane Morris LLP.
In October, the Abruzzinos were named in a similar lawsuit for a loan for their Crossings Mall property in Elkview. In that case, they denied the claims and alleged that the lenders acted in bad faith.
Three hotels owned by the Abruzzinos have all defaulted on loans and are currently involved in bankruptcy litigation.
U.S. District Court for the Southern District of New York case number: 1:18-cv-00948