Los Gatos Hotel Corp. Files for Chapter 11 Protection, Sues Joie de Vivre Hospitality

On Monday, Los Gatos Hotel Corporation voluntarily filed for chapter 11 bankruptcy protection in San Jose, California. The company was formed in 2000 to develop the Hotel Los Gatos, a 72-room boutique hotel located in Los Gatos, California. The property, which was built in 2002, also contains 2,000 square feet of meeting and conference space, Dio Deka (a Michelin star greek restaurant), and a 3,600 square foot spa and fitness facility. A courthouse auction of the hotel property had been scheduled to occur on December 7, 2010, but was delayed until January 31, 2011 at the last minute. According to bankruptcy court filings, the property was managed by Joie de Vivre Hospitality, Inc. prior to the chapter 11 filing (although the property is still listed as a Joie de Vivre hotel on its website). Los Gatos Hotel Corp. has now retained Folio Hospitality Management to manage the hotel.

On Wednesday, Los Gatos Hotel Corp. filed an adversary complaint against Joie de Vivre Hospitality, Inc. and Joie de Vivre Hospitality, LLC asserting that the Joie de Vivre companies had failed to turnover several hundred thousand dollars held in an operating account at Wells Fargo and also failed to provide additional information (such as books and records) needed for Folio to manage the hotel going forward. The complaint asks the bankruptcy court to force the Joie de Vivre companies to turnover the cash pursuant to section 542 of the Bankruptcy Code and, further, to find that the Joie de Vivre entities have “willfully and wrongfully” taken actions in violation of the automatic stay. In addition to the amounts in the bank account, the complaint seeks an award for “actual, punitive and other damages arising from Defendants’ willful violation of the automatic stay, including, but not limited to, all attorneys’ fees and expenses incurred in connection with” the adversary proceeding and preliminary and permanent injunctions prohibiting Joie de Vivre from taking any actions related to the hotel.

Los Gatos Hotel Corporation is represented in the bankruptcy case by the law firm of Mintz Levin Cohn Ferris Glovsky and Popeo, P.C.

Key court filings to date include (click on the title of any document for more information or to purchase):

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