San Diego – The Westin La Paloma Resort & Spa in Tuscon, Arizona and the Westin Hilton Head Island Resort & Spa on Hilton Head Island, South Carolina won court approval on Tuesday, January 17, 2012, to emerge from bankruptcy. The ruling marks a new beginning and a return to prominence for both resorts managed by Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) with new owners, Southwest Value Partners (“SWVP” – San Diego, California), who will infuse in excess of $60 million of new equity into the hotels, the majority of which will be used to complete a major capital improvement plan for both hotels.
SWVP co-managing partners Mark Schlossberg and Cary Mack structured the transaction, and positioned SWVP as equity to the reorganizing debtors. The Debtor’s plan of reorganization was confirmed by the Bankruptcy Court on January 3, 2012 and went effective on January 18, 2012.
“We viewed this as an ideal reorganization situation involving incredibly high quality assets that required strong ownership and equity to provide Westin with the tools necessary to position each hotel properly, allow them to emerge from bankruptcy, and maximize their operating performance,” said Mark Schlossberg.
Cary Mack added, “We are pleased with our investments on Hilton Head Island and in Tucson, and with the growth potential of these hotels over the near and long term as we renovate them and continue to maintain their focus on excellence. In partnership with Starwood Hotels we will meaningfully enhance the guest experience at each property through completing the largest capital improvement investment in the history of the resorts since their initial construction.
Starwood Hotels will continue to manage both resorts under a long term, 20-year management agreement. The improvements planned for both resorts include renovations of every guest room, all meeting spaces, main lobby areas, outdoor venues and pool areas. The plans are currently being finalized, with renovations slated to being immediately.
With a reorganization plan and new ownership in place, both Westin properties are poised for an exciting transformation. According to The Westin Hilton Head Island Resort & Spa General Manager, Andrew Czarnecki, “The Westin Hilton Head Island resort & Spa has recently made some significant property improvements but has been on hold with any major remodeling and renovations. The capital infusion from Southwest Value Partners will allow us to make this truly remarkable property even more outstanding.”
The Westin La Paloma’s General Manager, Jonathan Litvack adds, “The capital improvement plans for La Paloma will allow us to exceed all possible customer expectations with full facility renovations. We have been in a holding pattern on major improvements but now we can move full-steam ahead on the exciting transformation process for The Westin La Paloma Resort & Spa.”