The announcement that CNL-AB was filing for Chapter 11 reorganization came only days after CNL-AB assumed ownership of the property at a Jan. 28 foreclosure auction.
Morgan Stanley Real Estate, the property's lender from 2007 until last month, defaulted on a collateralized loan that CNL-AB had backed.
As a result, CNL-AB absorbed the Biltmore and seven other resorts included in an investment portfolio. It also assumed over $1.525 billion of debt, $1 billion of that from a securitized mortgage that matured Feb. 1, the day of the bankruptcy-protection filing.
Only five of the eight resorts in the portfolio are listed in the filing. One of the resorts acquired but not listed in the bankruptcy filing is the JW Marriott Desert Ridge in northeast Phoenix.
Its debt will become mature in May 2012, according to Armel Leslie of Walek & Associates, the corporation's public-relations firm.
The Biltmore is one in a long string of hotels and resorts in the Valley that have switched hands in recent years. Property owners that sought financing during the economic boom in 2006 and 2007 are often saddled with debt payments that far exceed the property's value and are forced into foreclosure or bankruptcy.
The Pointe Hilton Tapatio Cliffs Resort in Phoenix, the Intercontinental Montelucia Resort and Spa in Paradise Valley and the Wigwam Golf Resort and Spa in Litchfield Park are a few of the large resorts that have experienced more recent ownership changes due to financial troubles.
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