The U.S. District Court for Eastern Pennsylvania issued an order Nov. 24 to appoint a receiver to take possession of the former Holiday Inn at 521 Greenfield Road.
The facility is one of three Pennsylvania hotels for which CW Capital Asset Management LLC, acting as a servicer for Wells Fargo, obtained a receivership. The other two hotels are on Arsenal Road in York and on Holiday Drive in Pittsburgh.
The three were some of the 16 hotels purchased by Kronos Hotels LLC, for $64.9 million in June 2007.
The hotels began experiencing financial and management problems soon after the purchase. Lenders ultimately ousted Kronos two weeks ago after the Georgia-based firm defaulted on its loan payments.
Hyperion Hotels, also of Atlanta, gained ownership of the former Kronos properties and brought in Prism Hotels and Resorts of Dallas, Texas, to manage the facilities.
Hyperion's role in the current receivership transaction is unknown.
Hyperion officials did not respond to requests for interviews placed through their public relations agency this week. Similarly, an attorney reportedly working with Hyperion did not return any phone messages left on his office voice mail.
The court appointed Kyle Green, of Hospitality Receiver LLC, as receiver. According to the order, Hospitality Receiver "does business as" Prism Hotels and Resorts.
The order states the receivership is "for the purpose of maintaining the uninterrupted operation of the Project."
Further, the receiver, "is authorized to direct and take immediate possession and full control of the Receivership Property."
A full version of the order and exhibits used in the filing are available at www.lancasteronline.com, keyword: "
hotel lawsuit."
Prism Vice President Al Whitehouse said Prism's plans are "exactly the same" as a week ago when he told the Sunday News his company planned to restore the hotel and operate it long-term.
The court-appointed receiver is just one step in that process. "These things don't happen overnight," he said.
Last month, five other hotels formerly owned by Kronos were posted for foreclosure.
Two are in Dothan, Ala., while the other three are in Louisville, Ky., and Augusta and Brunswick, Ga.
Charles Morais, president of Kronos, and Jay Sharma, former general manager of the Greenfield Road hotel, are scheduled for a Dec. 30 hearing before Magisterial District Judge Denise Commins for selling alcohol without a liquor license at the hotel.
Chip Smedley is a staff writer for the Sunday News. E-mail him at csmedley@lnpnews.com.
