Royal Palm hotel heads for bankruptcy
Six years after opening the Royal Palm, developer R. Donahue Peebles has put the entity that owns the South Beach hotel into bankruptcy protection amid a dispute with a lender trying to foreclose on the property.
The bankruptcy filing of Royal Palm Senior Investors marks the latest twist in a complicated legal battle over the 417-room hotel that Peebles built with city subsidies at the start of the decade.
Lenders claim the primary owner, Coral Gables real estate investor Guy Mitchell, defaulted on loans that he and his partners secured when they paid $124 million in 2005 for 88 percent of the hotel. Peebles maintained a 12 percent stake and has been feuding with Mitchell almost from the start.
The latest fight involves Carbon Capital, a division of the Blackrock investment giant, which made a loan to Royal Palm Senior Investors for a condo-hotel conversion that ultimately fizzled. The bankruptcy filing lists a $30 million debt to Carbon, the only liability mentioned for the holding company.