Mystic Days Inn goes to auction after two bids are withdrawn
A court-ordered bankruptcy sale of the Days Inn of Mystic is proceeding after two bidders withdrew their $3.8 million offer for the 125-room hotel and restaurant, an attorney helping arrange the sale of the property said this week.
Lori Schwartz, an attorney for mortgage holder Home Loan Investment Bank of Warwick, R.I., said written bids for the hotel at 55 Whitehall Ave. of at least $3.61 million must be submitted before the sale is conducted Tuesday in New York City.
As of Thursday, she said, the bank had received no offers on the property, currently operated by Bharat Patel, who owns the hotel under the business name Sonu LLC.
"Unless we receive written offers, there will be no formal auction next week," Schwartz said in an email.
The bank received an offer of $3.8 million from Jiten Patel, no relation to Bharat Patel, and Mathew Varkey. But the pair, both from Swarthmore, Pa., later withdrew their bid, and the bank, using a newly minted limited liability company of which it is the sole member, substituted a bid of $3.6 million, which means it would take over the property if no further bids are received.
Sonu LLC, which is going through bankruptcy proceedings after the bank foreclosed on the property, is not current on its mortgage payments, Schwartz said. It is continuing to operate the motel, but currently owes the bank more than $6 million, she added.
A legal advertisement announcing the bankruptcy sale was placed in The Day last week.
"Since the bank is agreeing to accept less than the full amount it is owed, we wanted to see if anyone else was interested in buying the hotel," Schwartz said.
The 11 a.m. auction of the property will be held at the offices of Robinson Brog Leinwand Greene Genovese & Gluck P.C. at 875 Third Ave., ninth floor. A $150,000 deposit is required to participate, and no contingencies will be accepted.
"The sale and the sale proceeds will be the means by which creditors will be paid pursuant to the Sonu plan of liquidation, including unpaid taxes due through the closing date," Schwartz said.
For information, call 212-603-6334.
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