Aspen’s Hotel Jerome is now under new ownership
Glenwood Springs, CO Colorado
ASPEN, Colorado – The bankruptcy of investment banking giant Lehman Brothers at the start of the recession ended up having major implications on the fate of Aspen’s stately Hotel Jerome, according to a trail of public records.
The ownership of the iconic hotel quietly fell into the hands this winter of three Chicago investors who earlier outmaneuvered competitors to acquire the loan note on the Jerome.
Jerome Ventures LLC placed a winning bid in August 2009 to buy the note from Lehman Brothers, according to records in a Pitkin Court District Court case. A source familiar with the sale said it technically wasn’t part of the ongoing liquidation of Lehman Brothers. The company made the largest bankruptcy filing in U.S. history in 2008, triggering panic on Wall Street and helping plunge the country further into recession.
The loan note on the Hotel Jerome was never marketed or advertised for sale by Lehman Brothers. Jerome Ventures was one of four entities that inquired about buying the loan, and some of them made bids, the source said.
Four months after acquiring the note, Jerome Ventures started foreclosure proceedings against LCP-Elysian Aspen Owner LLC, which bought the Hotel Jerome in May 2007. Jerome Ventures claimed Elysian missed paying the $36.3 million loan in full last June.
The lender and borrower temporarily battled over the status of the loan repayment in a Pitkin County District Court case. Elysian threw in the towel and granted Jerome Ventures a special warranty deed in lieu of foreclosure on Dec. 10, 2009, according to records at the Pitkin County Clerk’s office. A lawsuit between the parties was dismissed and foreclosure proceedings stopped.
Elysian principal David Pisor didn’t return telephone calls seeking comment.
There was a seamless transition of the ownership of the hotel, which was built in 1889, during Aspen’s silver mining heyday. RockResorts, a luxury hotel management company owned by Vail Resorts, continues handling the Jerome’s operations.
The new owners haven’t publicly disclosed yet what their plans are for the hotel. Chicago real estate investor Fred Latsko, identified in court documents as a partner in Jerome Ventures, declined comment on the hotel’s future. He is the principal in a firm called Structure Management Midway LLC.
Latsko business associate Mark Hunt of M Development LLC, also of Chicago, is another investor in Jerome Ventures. He didn’t return phone calls seeking comment.
The address for Jerome Ventures is the same as yet another Chicago businessman, Don Wilson Jr.
A source familiar with their acquisition of the bank note from Lehman Brothers said it was indicative of the kinds of bargains available because of the recession. In this case, a troubled bank was willing to sell an asset well below the price it paid to acquire it. In other cases, banks are selling troubled assets to get them off their books.
Jerome Ventures acquired the Jerome note for less than $27 million, according to the source, who requested anonymity because there was no authorization to discuss the transaction.
That is about one-third of the price that Latsko was willing to pay to buy the Jerome shortly before the recession. Court records show Latsko had a contract to buy the hotel for $75 million from Elysian in 2008. He was unable to close the deal – but ultimately acquired the Jerome and saved himself millions in the process.
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