In New York this week, Judge Shelley Chapman of the U.S. Bankruptcy Court dismissed the involuntary chapter 11 filing against British Virgin Islands-based Aman Resorts Group, the former owner of a luxury hotel chain.
Creditors of Aman Resorts Group had filed an involuntary petition for bankruptcy as part of an ongoing power struggle over the luxury resort operator, claiming the hotel chain owed them an estimated $70.9 million in unpaid fees. Shortly after the filings, however, those involved in the case began stepping back, with three of the creditors who had signed the involuntary petition withdrawing along with their lawyer and a lawyer for Aman Resorts Group.
The dismissal, however, does not explain why the involuntary bankruptcy was filed in the first place, the Wall Street Journal notes.
"There is a blood feud going on for control of the resorts," Warren Usatine, an attorney with the law firm Cole Schotz, said. "People don’t fight this hard if there’s nothing to fight over."
The main issue, he said, appears to be over a foreclosure of the ownership interests in the debtor that was allegedly orchestrated by Vladislav Doronin, a Russin businessman. "He is alleged to have caused the debtor to default on the loan because he had ownership interest in the lender," Usatine said. "That foreclosure is at the heart of what the dispute is all about." Ultimately, Usatine said, the suit is the latest step in a "high-class, high-level and complicated" partnership dispute
Aman Resorts Group filed a lawsuit in New York blaming Doronin for gutting its sole asset—the holding company that owns Aman Resorts and related intellectual property—through a wrongful foreclosure action.
In 2014, Russian billionaire Vladislav Doronin and U.S. venture capitalist Omar Amanat teamed up to buy Aman Resorts, but after the acquisition, Amanat claimed Doronin illegally seized his shares and transferred them to another company.
Doronin, however, says the shares were properly transferred as part of a restructuring of the hotel chain that left him with full control. A judge in London agreed earlier this month, and Mr. Doronin said Aman Resorts Group Ltd. was simply an empty shell with no assets and with no connection to the hotel chain, now operating as Aman Hotel Co.
In court, Doronin described the “improperly filed bankruptcy” as another ploy. “As we stated to the court, we believe that this now-dismissed bankruptcy was a waste of not only the court’s time but of all concerned and is just the latest episode from a man whose improper activities should now be clear for all to see,” Doronin said. Amanat attended Monday’s court hearing but did not speak or respond to requests for comment.
Judge Chapman said that if creditors had filed the involuntary bankruptcy to question the validity of the transfer of ownership to Doronin that wouldn't be a “proper” reason for the filing.
Even though she dismissed the case, the judge said she expects to hold another hearing soon to investigate the matter further.
And Aman Resorts remains in the lurch: "Without a cash infusion by someone, which the factions won’t put in, the company could spiral," Usatine said.