PWM starts sale process for hotel as loan amendment deadline passes

By Sarah Lizee

Olympia, Wash., June 1 – PWM Property Management LLC has pivoted to a sale of its 181 West Madison hotel property now that a deadline to amend its mortgage loan has passed, according to a notice filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

Under the debtors’ Chapter 11 plan, which was confirmed in early April, the debtors would shift to a sale if the plan couldn’t be consummated through the loan amendment.

As background, following the court’s denial of confirmation of the debtors’ plan in November, the debtors negotiated with the mortgage lender, SL Green affiliate 245 Park Member LLC and HNA Group North America LLC with the goal of moving forward with a consensual plan.

The debtors and mortgage lender reached an agreement to modify the plan in a way that moots the SL Green affiliate’s limited objection.

If the West Madison debtors consummated the plan through an amendment to the mortgage loan agreement, PWM’s ownership interests in Eternal Fame would be transferred to HNA Group North America, rather than HNA Capital Leasing, and the West Madison settlement payment would be increased to $4.1 million from $3.5 million.

The debtors and the West Madison mortgage lender agreed that if the mortgage loan amendment had not become effective by May 31, the debtors would have until July 31 to solicit bids for the 181 West Madison property, unless the deadline is extended. Notably, the mortgage lender has agreed not to credit bid.

If the debtors do not receive a qualified bid by the deadline, or if they do but the sale does not close by Aug. 31, the automatic stay will be lifted and the mortgage lender will be allowed to pursue all available remedies under the mortgage loan agreement and applicable law, including the foreclosure of 181 West Madison.

181 West Madison is a 50-story skyscraper in Chicago, designed by Cesar Pelli and built in 1990.

New York-based PWM is a property management company. It filed Chapter 11 bankruptcy on Oct. 31, 2021 under case number 21-11445.

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