In New Filing, Saline Lodging Group Seeks New Chapter 11 Bankruptcy Plan

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Since Christmas, the Saline Lodging Group, owner of the stalled hotel project on Michigan Avenue in Saline, has filed to withdraw its old bankruptcy plan and file a new reorganization plan.

Before Christmas, US Eastern District of Michigan Bankruptcy Court Judge Maria Oxholm ruled the Saline Lodging Group was not eligible to file for Chapter 11 Subchapter V bankruptcy after the plan was challenged by Your Enterprise Solutions LLC., the sole secured creditor of the project. Your Enterprise Solutions LLC, controlled by Elizabeth Haeussler, and has claims more than $3.9 million, against Saline Lodging Group. 

The United States Trustee filed a motion to convert the case to a Chapter 7 bankruptcy, which is far more likely to result in the liquidation of assets.

On Dec. 27, Saline Lodging Group attorney Don Darnell filed a motion to withdraw the plan and file a new Chapter 11 plan by March 4, 2022.

The court agreed to withdraw the plan and set March 4 as the new deadline to submit a plan. On Dec. 27, The court also granted Darnell's motion for shortened notice and expedited hearing - a motion made to help the Saline Lodging Group oppose the Trustee's motion to convert the case to a Chapter 7 bankruptcy.

But on Dec. 29, Judge Oxholm issued an order denying the motion for shortened notice and expedited hearing, ruling that the Saline Lodging Group did not submit the documents it claimed it had.

Earlier in December, Saline Lodging Group, a group of 21 mostly local members, submitted their plan showing it would complete the hotel/restaurant project as a joint venture with K&B Capital, and make lump-sum payments to its creditors.  K&B Capital, controlled by Robert Kuttala of Shelby Township, is in the business of hotel development and redevelopment. Saline Lodging planned to sell 85 percent of the hotel to K&B for its $2,720,000 investment and recommence construction of the hotel as a joint venture within 60 days.

Court documents submitted by the Saline Lodging Group estimate it will cost $6 million to complete the hotel.

Creditors include the City of Saline and Washtenaw County, owed $129,901 in back taxes. In addition, debts include $156,000 to Acoustic Ceiling & Partition, $76,000 to Chelsea Lumber Company, $115,000 to Hoffman Plastering, $53,000 to Quality Roofing, and $335,000 to Tri-County Electric Group.

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