Area hotels to remain open while in bankruptcy

A group of 22 budget hotels — including ones in Elk Grove Village, Naperville and Prospect Heights — will remain open while lawyers fight behind the scenes to allow them to pay off at least $69 million in debt under Chapter 11 reorganization.

The Baymont Inn & Suites at 2881 Touhy Ave. in Elk Grove Village and another at 1585 Naperville-Wheaton Road in Naperville; Days Inn at 1000 W. Devon Ave. in Elk Grove Village and Super 8 at 540 N. Milwaukee Ave. in Prospect Heights are under the corporate name Budget Portfolio Properties LLC that filed Dec. 21 in U.S. Bankruptcy Court in Texas. BPP Illinois has eight hotels, all part of the bankruptcy.

Other affected hotels are in Rockford and Moline, as well as in Minnesota, Wisconsin, Iowa, Michigan and Texas. The hotels altogether employ about 375 workers.

“The bank wouldn't work with us,” said Davor Rukavina, a Dallas-based attorney representing the hotels. “If they would have given us a couple of years, we could have done it.”

Court documents cite debts of about $66 million, plus interest and fees for a total of at least $69 million.

All 22 hotels as a whole are responsible for the debt. The bankruptcy judge now could force the bank to work with the hotels on a payment plan for reorganization, said Rukavina.

The bank that is owed the $69 million is Citizens Bank of Pa., which filed foreclosures on each of the 22 hotels. Citizens is owned by Royal Bank of Scotland Group, which was taken over by the British government.

“The bank doesn't comment on pending litigation,” said Thomas Lombardo, a Chicago attorney with Riemer & Braunstein LLP, which represents Citizens.

BPP LLC is owned by FFC Capital Corp., lead by investor Milton Fine of Pittsburgh, Pa. Fine was unavailable for comment.

The next court date for the hotels is Jan. 19. Several months down the road, the hotels aim to negotiate a plan to reorganize, said Rukavina.

“They will stay open and it will be business as usual,” said Rukavina.