The estate of bankrupt securities firm Lehman Brothers Holdings Inc. has filed court papers to foreclose on Hawaii’s Ritz-Carlton Kapalua resort, continuing the carnage in that state’s hotel sector.
The luxury resort, which has two golf courses, has been owned since 2006 by a venture of Gencom Group and Goldman Sachs Group Inc.’s Whitehall Street Global Real Estate LP. The venture has been in default on its $255 million mortgage for more than a year partly because of its ill-fated strategy to convert 107 units into condominiums.
The venture and Lehman have been negotiating for months and those talks will continue as the foreclosure case moves through the court process. A Gencom representative said Monday that the joint venture’s “current intent is not to fight the foreclosure.”
The Ritz-Carlton Kapalua, located on the western shore of Maui, includes 356 hotel rooms, plus the condominiums. Ritz-Carlton will continue to manage the resort, according to representatives of Lehman and Marriott International Inc.’s Ritz-Carlton brand.
The foreclosure attempt is the latest in a string of loan delinquencies and foreclosures in Hawaii, where the tourist industry has been rocked by the global recession.