No impact on Capitol Plaza expected in Hammons bankruptcy

 

John Q. Hammons Hotels and Resorts filed for federal bankruptcy protection over the weekend, but the legal action probably won't be felt in Mid-Missouri.

Among its many properties, the company built Jefferson City's Capitol Plaza Hotel about 30 years ago, but sold it in 2005 to Atrium Holding Co.

Under that agreement, Hammons continued to manage the property - until last October, when Atrium Holding transferred those duties to its own, new management company, Atrium Hospitality LP.

"This hotel is not a subject to the bankruptcy, and its operations will not be affected," Daniel Abernathy, Atrium Hospitality's president told the News Tribune on Monday afternoon.

At a Monday news conference, the Springfield News-Leader reported, Jacqueline Dowdy - Hammons Hotels and Resorts' current CEO, said the company was "financially stable" and able to pay its bills.

But the bankruptcy filing temporarily allows the company to put the brakes on litigation involving the company, including a trial in Delaware scheduled to start late next month, she said.

"We want to ensure that the company Mr. Hammons built over 50 years and the financial and philanthropic commitments that he made have the opportunity to continue to thrive," Dowdy explained.

"A financial restructuring associated with Chapter 11 will help to provide the necessary framework and the safeguards to let us be there for our creditors, lenders, employees, guests and members of the community who benefit from the continued generosity of our legendary hotelier."

Hammons was 94 when he died in 2013.

The Wall Street Journal noted Jonathan Eilian - former managing director of private-equity giant Starwood Capital Group - sued the Hammons company after John Q. Hammons' death.

Eilian had loaned Hammons $300 million so he could take the hotel company private. As part of that 2005 deal, a Delaware court ruled the Hammons trust must sell the hotels with Eilian having first-refusal rights.

Hammons' chief counsel, Greggory Groves, told Monday's news conference that no hotels are closing, employees will continue receiving checks and benefits and customers shouldn't notice a thing.