NEW YORK Aug 20 The Government of Singapore
Investment Corp has bid $1.5 billion for a group of
bankrupt hotels owned by hedge fund Paulson & Co, including the
Arizona Biltmore Resort & Spa in Phoenix and La Quinta Resort &
Club in La Quinta, California.
The MSR Resort hotel group, which also includes Grand Wailea
Resorts Hotel & Spa in Hawaii and the Claremont Resort & Spa in
Berkeley, California, said it had chosen GIC as the 'stalking
horse' or low bidder for the hotels, after looking for an
initial bidder since May.
It said it had also spoken with possible equity investors
for a reorganization of the hotels before deciding on the GIC
GIC is a sovereign wealth fund that manages Singapore's
foreign reserves and is a large real estate investor in the
United States. It is a lender to the hotel group and had already
made an offer for the group shortly after the bankruptcy filing.
It offered $1.5 billion in cash and debt but the resort group
rebuffed it, saying it would try to do better for creditors.
Paulson bought the hotels from Morgan Stanley in 2011 and
put them into bankruptcy a month later, saying it planned to
reorganize them. It already sold one of the hotels, the Doral
Golf Resort & Spa in Miami, Florida, to Donald Trump.
Morgan Stanley Real Estate, part of Morgan Stanley,
had purchased the five hotels and three others in 2007 for about
$4 billion. The hotels filed with $2.2 billion in assets and
$1.9 billion in debt.
The $1.5 billion includes up to $1.12 billion in cash and
paying off up to $360 million in debt-related claims, according
to court documents.
The fund has arranged for a $28 million break-up fee if the
hotel group selects another bidder during a bankruptcy auction
that it hopes to hold on Oct. 25. A hearing in which the judge
will consider the stalking horse bid and sales process is
scheduled for Sept. 10.
The case is in Re: MSR Resort Golf Course, U.S. Bankruptcy
Court, District of Delaware, No. 11-10372.