March 17, 2011
The owner of Viceroy Anguilla Resort and Residences in Anguilla announced Thursday it has filed for Chapter 11 bankruptcy to pave the way for the sale of the luxury property on the exclusive Caribbean island.
Barnes Bay Development Ltd said a Starwood Capital Group-controlled affiliate owns the $358 million mortgage on Viceroy Anguilla and plans to acquire the resort. However, Barnes Bay Development asked the U.S. Bankruptcy Court in Delaware to hold an auction that will be open to other interested bidders.
“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,” the company said in a statement.
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, Barnes Bay said in a statement.
Barnes Bay listed assets of $530 million and liabilities of $461.9 million on its balance sheet as of Dec. 31, 2010.
The resort sits on 35 acres with more than 3,200 feet of beach frontage along the Barnes and Meads Bays and has 166 luxury residences. The properties, which range from about 500 square feet to nearly 6,200 square feet, have commanded prices ranging from $600,000 to $6.5 million.
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 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.”