Vail Plaza files for bankruptcy
Vail, CO Colorado
VAIL, Colorado ” Tightening credit markets caused Vail Plaza to file for bankruptcy Monday.
Plaza owner Waldir Prado said he filed for Chapter 11 bankruptcy ” which allows him to continue operating the business ” after he was unable to get a permanent loan because of the poor credit markets.
But the move isn’t cause for concern and the hotel will continue to function as it has since it opened, Prado said.
“It’s not a problem, it’s a solution,” he said.
Prado got a three-year construction loan to build the project. The loan was up in September and he was negotiating a new long-term loan. But talks stalled as the economy dipped ” leaving Prado with no way to pay the initial loan.
Prado filed for bankruptcy Monday and has 120 days to draft a payment plan, which has to be approved by a bankruptcy court judge. The plan could include a proposal to pay the construction loan off over several years, he said.
Transitioning from a construction loan to a permanent loan is a difficult process for businesses right now, said Don Cohen of the Economic Council of Eagle County.
But Cohen doesn’t see it as the beginning of a trend.
“I would like to think that this is much more of an isolated incident than the beginning of a trend,” he said. “I would not expect that we’ll see a lot of others.”
The decision to file for bankruptcy had nothing to do with the hotel’s finances, Prado said.
“Vail Plaza is in tremendous shape,” he said.
Despite some predictions that skier visits to the Vail Valley could dip this year, Prado said he’s anticipating a good year for the hotel.
“I do not predict any decrease ” maybe even an increase,” he said.
Prado said he doesn’t expect the higher-income clients that the plaza attracts to cut back on their trips to the area.
Filing for Chapter 11 bankruptcy isn’t uncommon, said Cohen, who called it a “business management tool.”
“It’s not an everyday occurrence, but it’s not wholly unusual,” Cohen said. “It’s definitely an opportunity to buy yourself breathing space and work things out.”
Prado is confident he’ll be able to get a loan when the markets recover.
“Ours is one of the first on the list that they’d take,” Prado said. “They consider Vail safe.”
Staff Writer Chris Outcalt can be reached at 970-748-2931 or firstname.lastname@example.org.
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