"We had some offers but either they were turned down by Meritor, Frenkil or were not in the best financial interest of the city," Hentschel said.
In October, Florida developer Judah Hertz agreed to buy the hotel for $5.5 million. The deal seemed promising to Meritor, the city and U.S. Bankruptcy Judge James F. Schneider.
Meritor would have gotten $4.5 million. The city would have gotten $1 million and retained the food and beverage operations at the hotel. Hertz would have had the option to buy the food and beverage from the city for $3.5 million.
Hertz wrote a $200,000 check for the deposit and the purchase agreement was approved by Schneider and the city Board of Estimates.
But Hertz ran into difficulties trying to arrange financing for the remaining $5.3 million. He failed to meet the initial Nov. 30 settlement deadline.
After Davies, the trustee, filed a complaint in bankruptcy court, Schneider a week ago ordered Hertz to settle by 10 a.m. yesterday. Hertz did not comply with the order.
After the sale, Davies said he will evaluate whether or not to go back to Schneider and seek damages. If any damages are awarded, they ultimately would go to the city as the leading creditor now that Meritor owns the bank.
Frenkil's One East Chase Street partnership filed for bankruptcy in May 1989 after the current mayor, Kurt L. Schmoke, refused to pump any more city money into the hotel.
