ASPEN — The bankruptcy of investment banking giant Lehman Brothers at the start of the recession ended up having major implications for the fate of Aspen’s stately Hotel Jerome, according to a trail of public records.
The ownership of the iconic hotel this winter quietly fell into the hands of three Chicago investors who outmaneuvered competitors to acquire the loan on the Jerome.
Jerome Ventures LLC placed a winning bid in August to buy the note from Lehman Brothers, according to records in a Pitkin County District Court case.
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, a source familiar with the sale 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, 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 what their plans are for the hotel.
