21 March 2017 – El País
Commercial Court number 1 in Vitoria has awarded the Hotel Silken Puerta de América Autonomous Production Unit (UPA, comprising the assets, rights and obligations, workers, contracts and administrative licences, to Farmington Investments, S.L., a Spanish company headquartered in Madrid and owned in its entirety by Bank of America.
According to the magistrate’s ruling, dated 10 October 2016, the price of the hotel’s Autonomous Production Unit is €16,320,000, of which €326,400 corresponds to the organisation of the on-going business activity and the remainder to the two properties and their mortgaged facilities and furniture. Farmington Investments will pay €8,132,338.97 by way of consideration and €8,187,661.03 by way of transfer into the account that the bankruptcy administrator designates for inclusion within the active mass of the bankrupt Hotel Puerta de Castilla, S.A..
The loans that Bank of America Merrill Lynch Limited (Balmi) holds with the bankrupt company (approximately 51% of the bankruptcy liability) will be waived, with the exception of one sum, amounting to €8,132,338.97, which will be offset by the purchase price of €16.32 million. The acquiring contractor subrogates the Autonomous Production Unit in the contracts and administrative licences, as well as in the employment contracts for affiliated personnel, in accordance with the list contained in the hotel liquidation plan. (…).
The trading company Hotel Puerta de Castilla S.A. was declared bankrupt, along with other companies, by a ruling dated 8 July 2015 (Ordinary bankruptcy 374/15), and was subsequently accumulated into ordinary bankruptcy 512/14 of the companies Grupo Urvasco, S.A. and Grupo Hotelero Urvasco, S.A. The final texts were submitted on 18 March 2016, and on 5 May 2016, the liquidation notice was enacted. The bankruptcy administrator submitted the liquidation plan for the bankrupt companies on 20 June 2016, and that is currently pending approval. On 19 July 2016, the bankruptcy administrator submitted a letter evidencing the offer to acquire the Autonomous Production Unit (UPA) ‘Hotel Silken Puerta América’, issued by Farmington Investment, S.L., which had been accepted and approved by Bank of America Merrill Lynch Limited (Balmi), valuing it positively and explaining the reasons why the foreclosure should be carried out without any further delay and without waiting for the approval of the liquidation plan.
For the magistrate, “there is no doubt that the offer is extremely interesting” for the insolvency, given that the acquiring party subrogates the bankrupt company in almost all of the contracts signed by the latter in relation to the hotel and the transfer of all of the workforce, which ensures the continuity of activity, as well as the on-going employment of the workers. (…).
Original story: El País
Translation: Carmel Drake