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Patrick Nesbitt Places Hotels Into Chapter 11 Bankruptcy

Eight Franchised Embassy Suites Hotels Were Financed Together

Thursday, August 9, 2012
By Brandon Fastman (Contact)

Hotelier, polo aficionado, and Carpinteria resident Patrick Nesbitt placed eight of his hotels into Chapter 11 bankruptcy protection on July 31. The franchised Embassy Suites Hotels were financed together in a single portfolio. Nesbitt, chair and CEO of Santa Monica–based Windsor Capital Group ​— ​a hotel management company that manages 22 hotels and owns 17 ​— ​said in his declaration that 14 months before he defaulted, he tried to refinance or modify a $187.5-million loan from Greenwich Capital Financial Products, Inc., that originated in 2006 but that the loan servicer refused to enter discussions until four months before the loan matured on February 6, 2011.

Pat Nesbitt
Click to enlarge photo

Paul Wellman (file)

Pat Nesbitt

Nesbitt is fighting the servicer, Torchlight Loan Services, LLC, for control of the portfolio ​— ​which includes hotels in Oregon, Washington, Texas, Colorado, Michigan, and Ohio ​— ​in New York Federal District Court. According to the declaration, the portfolio’s net income fell from $22 million to $13 million from 2008 to 2009. Craig Stechman, Windsor’s senior vice president of sales, marketing, and revenue, said that the lender suggested Nesbitt file and that “our business is continuing as usual. It has not affected any changes in staff or in business whatsoever.” A devaluation of assets, downturn in business, and loss of pricing power precipitated by the recession created a “perfect storm,” said Stechman. The filing lists estimated assets between $10 million and $50 million and liabilities between $100 million and $500 million.

Meanwhile, the Sheriff’s Department confirmed that Nesbitt’s residence was the scene of an alleged burglary reported on July 19. Two K9 units and a helicopter were enlisted in the search for the suspect, “a white male in dark clothes, 5‘9’ to 5‘10’, 150 to 160 lbs,” according to a release. The Sheriff’s Department is still investigating and looking for leads. In 2010, Nesbitt’s former personal assistant was convicted of embezzling $850,000 from Windsor.

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