A Prince George County hotel operator narrowly avoided a foreclosure auction last week by declaring bankruptcy. Meanwhile, another hotel in that area sold at auction for $745,000.
GJS Group LLC, which is managed by Gurdeep Singh, filed Sept. 15 for Chapter 11 bankruptcy protection. GJS owns the Howard Johnson hotel at 12205 S. Crater Road. The hotel, which is also called the Steven Kent, was to be auctioned Sept. 17.
The main creditor is the mortgage lender, said Charles Ayers, a lawyer with the firm Ayers and Stolte who is representing GJS Group.
“They think they can make things work out,” Ayers said. “They’ve invested money in legal council and filing Chapter 11 bankruptcy.”
Had they done nothing, the property would have been sold at auction.
Singh did not return a call seeking comment.
Instead, GJS has a few more months, at least, to turn around the business and try to pay back the lender, Ayers said.
According to a story in the Petersburg Progress-Index, the hotel, which was built in the early 1960s, used to be a popular stopping point for snow birds driving between the Northeast and Florida.
Seven miles away, the Road Way Inn at 405 E. Washington St. sold for $600,000 plus the assumption of $145,000 in debt, according to the auctioneer. A Canadian group submitted the winning bid, according to Steven Karbelk, president of the National Commercial Auctioneers. Karbelk wasn’t sure of the new owner’s plans.
Several out-of-state banks held the loans on the hotel. And one of the loans was through the SBA, he said.
Karbelk told the Progress-Index that the property was operating at 10 percent to 20 percent occupancy rate.
Aaron Kremer is the BizSense editor. Please send news tips to Editor@richmondbizsense.com.
