Columbia Hilton files Chapter 11 bankruptcy

January 18, 1991|By Michelle Singletary | Michelle Singletary,Evening Sun Staff

Citing increased competition and the economic slowdown, owners of the Columbia Hilton have filed for Chapter 11 protection from its creditors in U.S. Bankruptcy Court.

However, normal operations will not be affected, according to Charles Schumaker, managing general partner of Newport Hotels-Columbia Associates Limited Partnership, which owns the Columbia Hilton.

"Due to the present economic conditions and overbuilding in the hotel market, we had to file," Schumaker said today from the company's New York office. "We are working with our lenders."

Schumaker said the hotel currently has 120 full-time and part-time employees. The bankruptcy will not affect them, he said.

The owners filed yesterday for the hotel, The Club, which is a 100-seat cocktail lounge, and The Oak Grill, a 120-seat restaurant. The owners listed assets of $9 million and debt of $13.3 million. A first mortgage of $8.5 million is held by Mutual Benefit Life Insurance Co. based in Newark, N.J.

The hotel, which opened in 1982, is located on a 4-acre site on Twin Knolls Road near the intersection of Route 175 and Route 29.

Twice in 1985, the hotel faced the auction block because of financial problems with its principal lender. Because of that, a dissident group of partners forced the bankruptcy to fend off foreclosure and a sale of the hotel.

Schumaker and a group of investors bought the modern 152-room hotel in 1985 out of that bankruptcy proceeding.

At the time, owners said the money troubles were due to the original financing and not to lack of business.

This time the bankruptcy was precipitated by a poor market, Schumaker said.

"This situation is more related to the events of the last couple of years," he said. "The developing (of hotels) and a shrinking market has had an impact on us."

The only competition the Hilton has in its immediate area is the Columbia Inn in the Columbia Town Center.

An upscale hotel at Turf Valley Country Club is located in western Howard County. Other major hotel chains such as Holiday Inn, the Red Roof Inn and the Red Carpet Inn are located in Jessup.

But Schumaker said competitors reach as far as hotels in downtown Baltimore and newly built hotels near the Baltimore Washington International Airport.

The 120,000-square-foot hotel includes banquet and meeting rooms, indoor pool, sauna, a Jacuzzi and parking for 215 cars.

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