To seal the deal, the debtor will pay Margaritaville nearly $900,000 in back dues under the previous sublicense, categorized as an administrative expense.
Creditors Clear the Path to a New Beginning
OWS CRE Funding I LLC, the resort’s primary secured creditor, backed the arrangement, setting the stage for Friday’s confirmation hearing.
The saga traces back to July 2023, when the debtor’s former parent company filed for bankruptcy protection—just one day before mezzanine lenders were set to auction off the struggling hotel, restaurant, and retail property. The venue, which launched in 2021 during the height of the COVID-19 pandemic, found itself caught in a financial storm from the outset.
“Not surprisingly, the hotel faced very significant financial challenges as a result,” Judge Bentley remarked, also pointing to operational hurdles that compounded its troubles.
Restructuring, Settlements, and a New Future
After months of negotiations, a sale was permitted to proceed in September 2023, with mezzanine lenders—linked to Arden Group and Corten Real Estate—emerging as the sole bidders at an October auction. By December, the lenders had replaced management, ushering in a wave of resolutions to disputes tied to the Chapter 11 case.
