Holding company behind downtown Louisville Embassy Suites files bankruptcy
The private holding company that owns the Embassy Suites hotel in downtown Louisville has filed for Chapter 11 bankruptcy protection, but the move appears to have been prompted by a long-running dispute among the company’s owners.
LOUISVILLE, Ky. (WDRB) -- The private holding company that owns the Embassy Suites hotel in downtown Louisville has filed for Chapter 11 bankruptcy protection, but the move appears to have been prompted by a long-running dispute among the company’s owners, rather than the hotel’s finances.
Developer Eric Bachelor, the majority owner of Le Centre on Fourth LLC, initiated the Nov. 10 bankruptcy filing in federal court in Florida, according to court records.
Bachelor has been locked in a court battle with his business partner, the Al J. Schneider Co., for more than a year over the Schneider Co.’s management of the Embassy Suites, which opened in 2015 after a major renovation of a former department store building at 4th Street and Muhammad Ali Boulevard.
Bachelor, a former Ford Motor Co. executive and Outback Steakhouse franchisee, owns 60 percent of Le Centre -- the company that owns the hotel -- while the Schneider Co. owns the other 40 percent.
In a written statement, the Bachelor-controlled Le Centre said its bankruptcy filing will not disrupt the operations of the hotel.
“The restructuring is intended to unlock the value of the holding company’s asset for the benefit of all stakeholders and resolve various corporate issues,” according to the statement issued by Louisville public relations firm BoxCar PR, on behalf of Le Centre.
But in a statement of its own, the Schneider Co. said the bankruptcy was filed without its knowledge or consent. Le Centre does not need restructuring, the Schneider Co. said, and the bankruptcy case "is merely a symptom of an ongoing partnership dispute with Mr. Bachelor."
Bachelor alleged in a lawsuit filed in June 2016 that the Schneider Co. put the 304-room hotel at risk of foreclosure because of its failure to meet goals for profitability and other financial metrics.
The Schneider Co., a family-owned firm that owns the Galt House and Crowne Plaza hotels, among other assets, has called the lawsuit “a sham” by Bachelor to “attack and undermine” his business partner for his own “greed and hubris.”
The case remains pending in Jefferson Circuit Court.
Le Centre said it filed bankruptcy to "advance a competitive, open sale of the property" while also preserving the company's remaining federal tax credits for the rehabilitation of the historic building and to "resolve or litigate claims in a single forum," according to federal court records.
The bankruptcy papers say Le Centre turned a $3.9 million profit during the year ended Aug. 31.
"The Embassy Suites Hotel is remarkably profitable, highly rated, and well-managed by the Al J. Schneider Company (“AJS”) in a Four-Star manner," the Schneider Co. said in its statement Monday. "The Hotel is staffed with hundreds of hard-working Louisvillians, is well capitalized, and in no need of restructuring. AJS is committed to its substantial investment in the Le Centre on Fourth project, which far exceeds the contributions of Mr. Bachelor."