SEQUIM – After nearly a year in court, Bret Wirta, owner of Holiday Inn Express & Suites on the east side of Sequim, has a court-approved plan to revamp his hotel under Chapter 11 bankruptcy and retain ownership.
“I am relieved that justice has been served and our plan has been confirmed,” he said in an interview last week at the hotel at 1441 E. Washington St.
“We are always disappointed,” Wirta said. “After the last recession we all bailed out the banks, and during this pandemic they tried to take advantage and take over this hotel under me.
“It was legal, but that doesn’t mean it was fair. We’re doing our best during the pandemic, and I’m glad that cloud has risen above us. ”
A plan was confirmed by Judge Marc Barreca on July 14 at the US Bankruptcy Court Western District in Washington between Wirta’s company, Wirta Hotels 3, LLC, and its loan bank, Wilmington Trust, which serves as trustee for Citigroup Commercial Mortgage. Trust.
Wirta and his wife Trisha, who have owned and operated the hotel since April 2010, learned that bank officials placed a notice on the doors of the hotel in August 2020 indicating that there was going to be a receiver, a new operator, set up for the company due to late payments.
The Wirtas have filed for Chapter 11 bankruptcy to retain the property and have asked to delay payments due to the impact of COVID-19 on the hospitality industry, Bret Wirta said.
From March 2020 to summer 2020, he said he negotiated late payments with the bank, but later found out they were preparing to go into escrow.
Wilmington Trust has until today to appeal the court’s decision, Wirta said, and if there is no appeal, a hearing will decide the total fees and penalties owed.
According to court documents, Wirta could owe Holiday Inn‘s lending bank, Wilmington Trust, National Association, approximately $ 575,000 in claims, including legal fees from her bank. His monthly payments before the pandemic were around $ 46,880 in principal and interest, he said, adding that both parties had agreed his total loan was around $ 8.5 million.
A prepayment premium of around $ 2.4 million was filed by lawyers for Wilmington Trust because the Wirtas were seen as overdue, but the amount was denied by the judge, according to court documents.
Wirta said the agreed plan was one he crafted with the help of his lawyers with Foster Garvey and a Premier Capital financial advisor suggested in September 2020, when the hearings began.
He said Wilmington Trust had done everything possible to get more fees despite Wirta agreeing to her “astronomical fees and penalties”.
“They actively tried to prevent the judge from confirming our plan,” he said. “Without confirmation of the plan, the court would have had no choice but to appoint a receiver to run the hotel and then sell it under Trisha and me.
“Their goal has never changed since the day they started this attempt to take over our hotel. To me, the greed of these bankers is breathtaking.
Wilmington Trust officials said they generally do not comment on matters as a director.
According to court documents, the Wirtas were granted relief to pay employees and utilities early in the bankruptcy process.
The judge authorized Wirta to “assume and continue performance under the franchise agreement in much the same way as before the Chapter 11 cases,” the court documents say.
From August, he must start repaying the unsecured loan amount from the bank, according to court documents, and if the Wirtas are in arrears, they must provide the bank with a written notice and have 30 days. to respond and repay the overdue amount. .
Lawyers for the bank estimate in court documents that the Holiday Inn Express will be valued at $ 15.2 million by early 2024, as the economy stabilizes.
“I am grateful for the support we have received from the community,” said Wirta. “Especially the staff with double gloomy days with the pandemic and bankruptcy cases. They were amazing.
Wirta’s other businesses, the Black Bear Diner, 1471 E. Washington St., and Quality Inn & Suites at Olympic National Park, 134 River Road, have been affected by the pandemic, he said, but his other banks better understood the world situation. .
“The banks worked with us at no outrageous cost,” he said. “Most of the owners that I know, their banks have worked with them. ”
Today, the Holiday Inn Express employs 29 full-time and part-time people, most of whom were held up during the pandemic, Wirta said.
Like most employers, Wirta is looking for more staff despite hourly wage increases and offers signing and longevity bonuses; it previously employed 49 people at the company’s peak hiring in 2019.
A silver lining during the pandemic, he said, saw an increase in the number of visitors to the Olympic Peninsula, especially first-timers.
Its Tesla charging station could play a role in that, Wirta said.
“I can’t say if they ate a burger or if they stayed at the hotel in particular, but there is a good chance that they have planned a trip to come here because of it,” he said. said Wirta.
In 2022, he plans a remodel of around $ 1.5-2 million for resurfacing and installing new furniture in the hotel. Under the franchise agreement, he’s required to remodel certain elements every 10 years, but Wirta has said he wants to do a few more things than necessary.
“The goal is to be the most beautiful hotel on the peninsula,” he said.
For more hotel information, call 360-681-8756 or visit ihg.com.
Matthew Nash is a reporter for the Olympic Peninsula News Group, which is made up of the newspapers from Sound Publishing, Peninsula Daily News, Sequim Gazette and Forks Forum. Reach it at [email protected].