March 17, 2011
ANGUILLA, British West Indies–(Hospitality Business News)–Barnes Bay Development Ltd. announced today that it has filed a Chapter 11 plan in the United States Bankruptcy Court for the District of Delaware to facilitate the sale of the Viceroy Anguilla Resort and Residences.
The sale of the property will be conducted under a Chapter 11 plan and in accordance with section 363 of the Bankruptcy Code. Barnes Bay has asked the Court for the sale to take place in Anguilla in compliance with Anguillan law – a process that will result in an auction open to any interested bidder. A Starwood Capital Group controlled affiliate owns the $358 million mortgage on Viceroy Anguilla and expects to acquire the resort as part of the sale and bankruptcy plan.
Viceroy Anguilla is situated on 35 acres with more than 3,200 feet of beach frontage along both Barnes and Meads Bays. The resort has 166 luxury residences consisting of suites, penthouses, townhouses and villas ranging in size from approximately 500 square feet to nearly 6,200 square feet each with its own private pool and outdoor spaces ranging from 200 to over 2,800 square feet. Sixty-eight of the property’s condos and villas sold for prices that ranged from $600,000 to $6.5 million.
As part of the bankruptcy process, Starwood Capital will provide debtor-in-possession financing and an additional several million dollars to pay unsecured creditors in the event that it is the successful bidder at the auction and the bankruptcy plan is confirmed. The auction, which is subject to Court approval, is expected to occur in May and the Chapter 11 plan is expected to be completed within 70 to 90 days.
According to representatives from Barnes Bay and Starwood Capital, the bankruptcy will have no impact on resort operations. The two firms have pledged to cooperate to avoid any interruption of service and ensure that the amenities, property maintenance and overall quality of guest experience are not diminished during this process. Viceroy Hotel Group, who will continue to manage the resort, said that guests can continue to expect the same extraordinary level of service and amenities from Viceroy Anguilla for which the property has become known. Barnes Bay also said that the resort’s employees, local vendors and service providers will be paid as they always have been.
Starwood Capital acquired the construction loan last year. During the past six months, the firm has invested approximately $12 million to finish construction and operate the property.
If Starwood Capital successfully acquires the property at the auction and the bankruptcy plan is confirmed, the firm said it expects to invest additional millions of dollars later this year to further improve the guest experience. Additionally, Starwood Capital expects to work with the current buyers to close on the contracts that Barnes Bay signed for the sale of condos and villas and intends to reduce the purchase price of many residences to reflect the fact that almost two years have elapsed since the buyers intended to close.
“Approximately $550 million has been invested in this resort,” said a Starwood Capital spokesperson. “No expense was spared and the resort is truly stunning.”
“We want to own this property and we hope those individuals who have deposits with Barnes Bay will choose to close and take advantage of the significant savings we are offering,” said the spokesperson. “We think this is the premier resort property in the Caribbean and we expect to make it even better.”