A bankruptcy judge refused to approve a proposed loan package for the Bishop’s Lodge hotel in Santa Fe, N.M., sending the luxury resort back to the negotiating table with lenders and shareholders, WSJPro reported. Judge Mary Walrath of the U.S. Bankruptcy Court in Wilmington, Del., granted a two-week continuance in the chapter 11 case on Thursday, agreeing to postpone until Oct. 7 the hotel’s request to finalize a bankruptcy loan to keep itself afloat. The delay came after Judge Walrath signaled she wasn’t inclined to approve the hotel’s loan proposal with its existing mezzanine lender, Juniper Bishops LLC, which has proposed assuming 100% control of the hotel in return for $36 million in debt forgiveness under a pre-negotiated plan that would also restructure a roughly $40 million loan to the senior-most lender, Fortress Investment Group LLC. The holding company’s president, Michael Norvet, testified in Thursday’s court hearing and faced questioning about whether he considered any restructuring options other than handing control to Juniper. He said he didn’t negotiate a bankruptcy loan with anyone outside Juniper. Judge Walrath said the testimony raised serious questions in her mind about the resort’s intent to exercise its duties to consider competing restructuring options.
