The hip, nongaming Artisan Hotel & Spa in Las Vegas has agreed to be foreclosed on by a lender.
Artisan Hotel & Spa
Struggling with nearly $8 million in debt, the 64-room property is a locals favorite and is known for its lounge entertainment and fine art collection.
Attorneys in the case and Artisan co-owner Douglas Da Silva couldn’t immediately be reached for comment Wednesday, so it’s unclear when ownership and management of the property may change hands.
The Artisan, at Sahara Avenue and Interstate 15, filed for Chapter 11 bankruptcy reorganization in December 2008.
At that time, its assets were reported at $18.3 million, including $18.2 million for the hotel real estate, and exceeded liabilities were listed as $7.85 million.
Creditors listed in the filing included Citizens Bank of Oregon, Mo., owed $7.8 million.
Bankruptcy court records showed the property had 41 employees, generated more than $115,000 in revenue in December 2008 and turned a cash profit for that month of about $18,000.
The company continued to show small cash profits through February but appeared to be losing money taking account monthly debt payments it was delinquent on.
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The bankruptcy case was later combined with the bankruptcy case for Da Silva’s Artisan hotel in El Paso, Texas.
Continuing financial problems at the companies became evident early this month when the Internal Revenue Service asked that the Chapter 11 cases be converted to Chapter 7 liquidations because the companies had failed to file federal employment tax returns and tax deposits since the bankruptcy cases were filed a year earlier.
Then, on Friday, attorneys for Da Silva, his wife, Ninette, and Garrett Capital LLC, successor to Citizens Bank of Oregon, Mo., filed court papers in which the Da Silvas agreed to allow Garrett to foreclose on the Las Vegas Artisan.
The stipulation noted “the debtor has violated a number of covenants and conditions” with the lender and that Garrett could seek the appointment of a receiver to operate the property pending the foreclosure sale.
Court papers filed by Citizens Bank show the Artisan had failed to comply with the terms of a February agreement with Citizens Bank to make debt payments since March and owed more than $633,000 in deficiency payments.
A Citizens Bank court filing also alleged the Artisan and the Da Silvas had:
• Failed to maintain property insurance for the hotel and its contents, forcing Citizens Bank to make an insurance premium payment.
• Failed to pay real estate taxes for the property.
• Allowed liens to be filed against the property, including several filed by the city of Las Vegas.
• Failed to file a bankruptcy reorganization plan for the property by Sept. 30.
• Failed to file monthly operating reports.