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Marriott objects to M Waikiki DIP financing increase, wants progress
By Caroline Salls
Pittsburgh, Jan. 13 - M Waikiki, LLC's proposed $9 million amended debtor-in-possession facility drew an objection Thursday from Marriott Hotel Services, Inc. and Marriott International, Inc., according to a filing with the U.S. Bankruptcy Court for the District of Hawaii.
The Marriott entities said the incurrence of "another enormous debt" would be irresponsible "until clear progress is made towards reorganizing debtor's Chapter 11 estate, creditors receive some assurance that this estate will not be administratively insolvent and fee applications have been filed."
According to the objection, M Waikiki has already received $3.05 million in post-bankruptcy secured financing and now seeks an additional $1.28 million on an interim basis under the amended facility to pay $2.14 million in January attorneys' fees.
"It is unreasonable to expend substantial funds now on fees alone without additional critical information, such as the value of the hotel in this single-asset case," the Marriott entities said in the objection.
"The request in debtor's second supplemental DIP motion for additional funding for accrued payables for operations belies debtor's claim that the hotel has nearly broken even.
"At a minimum, the value of the hotel, expected performance in the near and long term, a term sheet for a viable plan of reorganization and fee applications should be disclosed and/or filed before a substantial request for funding is approved."
The interim hearing is scheduled for Jan. 17.
M Waikiki, a San Diego-based hotel investment company, filed for bankruptcy on Aug. 31. The Chapter 11 case number is 11-02371.
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