Embassy Suites by Hilton is located on South Fourth Street near Fourth Street Live. | Courtesy of Jefferson County PVA

The Al J. Schneider Co., the manager of the Embassy Suites downtown and a minority stakeholder in the hotel, Wednesday asked a Florida bankruptcy judge to dismiss a petition to reorganize the hotel under Chapter 11 bankruptcy, claiming that the petition was just the latest attempt by the developer and majority stakeholder Eric Bachelor to seize sole ownership of the Embassy Suites.

“The Bankruptcy Case is a misplaced attempt to resolve an ongoing partnership dispute between the two members and co-manager of the Debtor,” states The Al J. Schneider Co. motion to dismiss the bankruptcy case. The motion also asked that if the case was not dismissed, that it be remanded to federal court in Kentucky, where the two parties are currently in a legal battle.

In the original filing to petition for reorganization, a representative for Bachelor stated that U.S. Bank notified him in October 2016 that the loan was in default and would start accruing additional interest.

The Al J. Schneider Co. argued in its motion that despite Bachelor’s claims that the hotel is facing imminent foreclosure from U.S. Bank, the hotel was solvent and that its revenue had increased each year. It also noted that there had been no foreclosure filing to date.

During the past 12 months ended in September, the Embassy Suites earned $17 million in revenue, compared to $15.9 million in 2016, according to the motion. Its operating profit also rose to nearly $4.9 million during the past 12 months from $4.2 million in 2016.

According to the bankruptcy petition filed on behalf of Bachelor, the net income was almost $3.9 million for the past 13 months. The estimated market value of the hotel is $79 million, according to the petition.

The Al J. Schneider Co. submitted Insider’s story about the bankruptcy filing as evidence that the case was a tactic Bachelor was using to sell the Embassy Suites without permission from The Al J. Schneider Co., which owns a 40 percent stake in the hotel.

Bachelor has argued to the media and in court that The Al J. Schneider Co. is mismanaging the Embassy Suites. Bachelor filed a lawsuit in May 2016 against the company, which has resulted in a counter lawsuit.

“The restructuring is intended to unlock the value of the holding company’s asset for the benefit of all stakeholders and resolve various corporate issues,” a press release about the bankruptcy petition sent on behalf of Bachelor stated.

In the petition, Bachelor said that The Al J. Schneider Co. refuses to give him access to Embassy Suites or its records, is “jeopardizing” its franchisee license with Hilton Worldwide by having a general manager who is not certified by Hilton, and is “failing to deposit all monies received by AJS from the operation of the Hotel” into the property account.

As evidence of its management, The Al J. Schneider Co. noted in its motion that the Embassy Suites had a four-diamond rating from AAA and as deemed “outstanding” in a recent report from Hilton Worldwide, which owns the Embassy Suites brand.

The Louisville company has continued to manage the Embassy Suites through the local court battle.

In both its motion filed Wednesday and a past court filing in Jefferson County Circuit Court, The Al J. Schneider Co. said Bachelor attempted to stage “a coup” by telling employees that if they did not agree to work for him and a new hotel management company, Schulte Hospitality Group, that they would lose their jobs.

The Al J. Schneider Co. also stated in the Jefferson County Circuit Court filing that Bachelor had attempted to paint a negative picture of the hotel’s operation in order to coerce the company to sell its stake in the Embassy Suites for $0.50 on the dollar and has been trying to use legal action to cut the company out of the decision-making ever since The Al J. Schneider Co. leadership voted against Bachelor’s proposal to buy its stake.

“This case is about the greed and hubris of Eric Bachelor, who utilized an entity ultimately owned by U.S. Bank N.A. to initiate sham litigation as a Hail Mary attempt to attack and undermine his business partner, AJS, for his own personal gain. In doing so, Bachelor has repeatedly attempted to mislead this Court, an extort AJS out of its investment and management role,” the court documents state.

This post may be updated.

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