The owner of the tropical island-themed Margaritaville Resort Times Square in New York has filed for bankruptcy to stop an imminent foreclosure sale, WSJ Pro Bankruptcy reported. The legal entity that owns the Times Square hotel, inspired by the namesake Jimmy Buffett song, blamed its financial difficulties partly on fallout from the COVID-19 pandemic since the hotel opened in 2021, according to its bankruptcy filing Sunday with the U.S. Bankruptcy Court of Manhattan. It owes $309 million to its lenders. The hotel, which has 75 employees, will likely file for bankruptcy itself, according to a court filing. A lender has said that the property is significantly underwater and that the owner doesn’t dispute that it has defaulted on its debt. In late June, the owner sued the lender in a state court, hoping to postpone a Monday foreclosure sale and give it time to hang on and search for debt refinancing. But the business “was unable to obtain a temporary restraining order to stay the auction sale in the state court, triggering the urgency for the bankruptcy filing,” President Sethian Pomerantz said in a sworn declaration filed with the court. The chapter 11 filing put the foreclosure sale on hold, a lawyer for the hotel owner told the Wall Street Journal. The company’s goal is to negotiate with its creditors and refinance its debt.
