Sharif El-Gamal’s Soho Properties filed a petition seeking chapter 11 bankruptcy protection for the Margaritaville Resort Times Square at 560 Seventh Avenue in the Garment District in Manhattan. The property has $309 million in secured and mezzanine debt. The bankruptcy is intended to block a UCC foreclosure auction scheduled for today for the $57 million senior mezzanine loan.
Sharif El-Gamal’s Soho Properties filed a lawsuit in New York State Supreme Court June 28, 2023, seeking to block a UCC auction set for July 10, 2023 to sell a $57 million mezzanine loan secured by the Margaritaville Resort Times Square at 560 Seventh Avenue in the Garment District in Manhattan. The original notice for the auction was published in April. The complaint alleges the sale is commercially unreasonable.
According to the bankruptcy petition:
“The Hotel is subject to multiple credit facilities, including a senior mortgage loan, senior mezzanine loan and junior mezzanine loan, aggregating $309 million, plus accrued interest… The AREPIII MVTS, LLC [Arden Group] securing a mezzanine loan in the original principal amount of $57,000,000, plus millions of dollars of accrued interest, the precise amount of which is disputed. A junior mezzanine loan in the original principal amount of $85 million was provided by Global One Professional Investment Type Private U.S. Real Estate Investment Trust… The Hotel consists of 234 guest rooms and 34,271 square feet of retail space. The Hotel was appraised in May 2023 as having a value of between $266 million and $350 million, and it employs approximately 75 people…”