Parretti hotel holding files for Chapter 11: Imperial Hotels cites inability to make loan payment.

Parretti hotel holding files for Chapter 11

Imperial Hotels cites inability to make loan payment

On top of all Giancarlo Parretti's problems at MGM-Pathe Communications Co., another one of his companies has filed for Chapter 11 bankruptcy protection in U.S. District Court in Los Angeles.

On April 3, Imperial Hotels Corp., which owns and operates 42 hotels around the country, filed for Chapter 11 financial reorganization, listing assets of $51.9 million and liabilities of $46.2 million.

The majority stockholder of Los Angeles-based Imperial is Scotti International Holding N.V., a company that is owned by Comfinance S.A. Comfinance is a European operation headed by Parretti, who last week was ousted as chief executive of MGM-Pathe.

Parretti, who bought the entertainment company last fall, remains as a director and majority stockholder of Pathe Communications.

Brad Godshall, Imperial's bankruptcy attorney, said the filing was necessary because of the company's inability to make payments on a $18 million bank loan.

He said Imperial Hotels is currently working on a reorganization plan that could include selling off some of its assets, including the sale of one or more of its hotel properties.

Company President Juan Sanchez-Llaca was traveling and unavailable for comment. Imperial's in-house counsel, Theodore Cohen, did not return a phone call from the Business Journal.

Imperial Hotels is the second major Los Angeles-based hotel company to acknowledge financial problems in recent weeks.

Brentwood-based Hotel Investors Trust, the county's second largest hotel company, named a new president in late March and said it was moving to San Diego. Though the company, which has 38 hotels in 20 states, has not filed for bankruptcy, its financial picture has been steadily declining.

The price of Hotel Investors Trust stock, which is paired with its sister company, Hotel Investors Corp. in San Diego, has dropped more than 60 percent during the past year to about $1.80 a share. Earlier this month the paired companies announced a net loss of $27.59 million on revenues of $117 million in 1990, compared to a loss of $60.3 million on $115.4 million in revenues in 1989.

Beverly Hills-based Hilton Hotels Corp., the county's largest hotel company, has also acknowledged some financial problems because of a downturn in business, but its results have been fairly steady. Hilton reported 1990 income of $112.5 million, a 2 percent increase from 1989, on revenues of $1.12 billion, a 13 percent hike from 1989.

In its bankruptcy filing, Imperial Hotels, the county's third largest hotel company, lists more than 2,000 creditors, mostly suppliers. Among the largest unsecured creditors are lessors and financial institutions, including Choice Hotels in Silver Springs, Md. ($748,411); Kemper National P&C Co. in Atlanta ($69,458); CLS/Mia Basic Four of Long Beach ($62,202); and CIT Group/Line Financial in Berwyn, Pa. ($56,938).

The bankruptcy petition also notes that Imperial Hotels has paid Godshall's Los Angeles law firm, Latham & Watkins, $325,000 to represent the company during bankruptcy proceedings.

In addition to Scotti International, major shareholders of Imperial include Micro-Consultants Inc., Talavera Cafe Inc., and Maryland Imperial Hotel Corp., according to the bankruptcy petition.

The petition notes that a predecessor company to Imperial Hotels had filed for bankruptcy in New Jersey in 1965.

"The company (Imperial Hotels in Los Angeles) was forced into the bankruptcy to avoid foreclosure on a couple of the properties because it was not able to meet loans that had matured with a primary lender," said Godshall.

He said Imperial Hotels owns or manages hotels in several states that operate under several names, including Econoline and Quality Inns. He said most of the hotels are medium-sized properties with middle-range prices.

A creditors' meeting is scheduled for April 24 in the U.S. District Court.

Godshall said he was unfamiliar with any of the details of the Parretti connection or whether the financier's problems at MGM-Pathe are connected to the bankruptcy filing at Imperial Hotels.

MGM-Pathe has had a series of financial problems, including a lawsuit by creditors claiming they are owed at least $10 million. MGM-Pathe is also being investigated by the Securities and Exchange Commission.