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Walt Disney World (WDW) News Discuss Disney Resort Closing??? in the News & Rumors forums; According to the Orlando Sentinel, The Grosvenor Resort at Walt Disney World, weakened by the recent tourism downturn and unable to repay about $51 million in debt, filed this week ...
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    Lou Mongello's Avatar
    Lou Mongello is offline Lou Mongello (AKQJ10) - Disney Expert, Host, Author, Speaker and Entrepreneur
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    Disney Resort Closing???

    According to the Orlando Sentinel, The Grosvenor Resort at Walt Disney World, weakened by the recent tourism downturn and unable to repay about $51 million in debt, filed this week for bankruptcy reorganization in Orlando.

    Anyone have any updates or other news on this?
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    tiggerguy's Avatar
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    Quote Originally Posted by AKQJ10
    According to the Orlando Sentinel, The Grosvenor Resort at Walt Disney World, weakened by the recent tourism downturn and unable to repay about $51 million in debt, filed this week for bankruptcy reorganization in Orlando.

    Anyone have any updates or other news on this?

    I can't find out any info on this, even on the Slantinel's web site. Did it say what chapter of bankruptcy?
    Brian
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    Lou Mongello's Avatar
    Lou Mongello is offline Lou Mongello (AKQJ10) - Disney Expert, Host, Author, Speaker and Entrepreneur
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    The 626-room Grosvenor Resort at Walt Disney World Files for Bankruptcy; Unable to Repay $51 million in Debt

    By Jerry W. Jackson, The Orlando Sentinel, Fla.

    The Grosvenor Resort at Walt Disney World, weakened by the recent tourism downturn and unable to repay about $51 million in debt, filed this week for bankruptcy reorganization in Orlando
    Under Chapter 11 of the U.S. Bankruptcy Code, the 626-room hotel can operate with protection from creditors while it crafts a turnaround plan.

    "We intend to repay the debts and be out of bankruptcy soon," R. Scott Shuker, an Orlando bankruptcy attorney representing the hotel, said Wednesday.

    "Payroll will be paid; no one will be let go," Shuker said, and the hotel will continue operating as usual, serving guests and taking reservations. It employs 303 people.

    Shuker said the 19-story hotel, which is located on Disney property but independently owned, has seen its occupancy and revenue rise in recent months and foresees a financial recovery. But efforts to negotiate new financing with the hotel's lender failed. Orix Credit Alliance, a New York-based lender owned by a Tokyo company, filed for foreclosure on the property last June.

    "We had a deal in principle, but we just weren't given enough time to raise the money," Shuker said. "It's actually a relatively healthy hotel."

    Andy Brumby, an Orlando attorney representing Orix, could not be reached late Wednesday.

    Shuker said the hotel owner, Grosvenor Orlando Associates, a San Francisco-based limited partnership, intends to repay the $49.9 million owed to Orix as well as another $1 million owed to unsecured creditors.

    "We intend to pay 100 cents on the dollar over a couple of years," Shuker said.

    Unlike the Hyatt Orlando, which recently had to close its doors for lack of revenue, Shuker said, the Grosvenor has enough cash and cash flow to operate. The hotel had $1.3 million in cash on hand at the time of the filing early this week, Shuker said, and is current with major bills such as its ground lease with Disney.

    The bankruptcy petition lists assets of between $10 million and $50 million, but Shuker said the true value is difficult to pin down in part because of the ground lease.

    Recent appraisals valued the hotel at between $44 million and $60 million. The higher appraisal was made before the Sept. 11, 2001, terrorist attacks pummeled the travel industry, but Shuker said the hotel and the market have recently rebounded.

    "All the trends have been up," he said, but the hotel's occupancy and room revenue estimates were not available.

    The hotel at 1850 Hotel Plaza Boulevard opened in 1972 as the Americana Dutch Resort, one of the first hotels on Disney property. After a decade, the hotel suffered from age and heavy use and was acquired in 1986 for $33 million and refurbished by the current owners.

    A strike by union workers at the hotel in 1996 led to a lengthy legal battle and the eventual reinstatement of about 50 workers in 1998. The employees were fired during the strike, but an administrative law judge ruled that the firings were improper. Demands for back pay are ongoing.

    Shuker said all the union issues have been resolved and any back-pay claims outstanding would be handled through the bankruptcy court. The case has been assigned to Bankruptcy Judge Arthur B. Briskman.

    (I am unsure of the date of the article, as it was sent to me via email)
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    At first I was thinking a real Disney owned Resort was closing the doors. This was originally printed in Feb of this year.

    I really don't know how they got that far behind. Like many hotels there at downtown. They take the overflow from Disney and usually are full most of the time. Sounds like there is more than what they are saying.

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