The reading of the legal notice at the foreclosure auction for the Hagerstown Hotel and Convention Center lasted longer than the actual bidding Tuesday, with the company holding the promissory note on the property being the sole bidder at $2 million.
VFC Partners 8 LLC submitted the bid in front of the Washington County Courthouse in Hagerstown. The limited liability corporation is the owner of the promissory note on the hotel and convention center, according to an affidavit filed in March with the clerk of the Circuit Court for Washington County.
A promissory note is a written promise to pay a certain sum of money to the bearer on demand.
Once the sale receives approval from Washington County Circuit Court, VFC Partners will acquire ownership of the 108-room hotel and convention center situated on more than six acres at 1910 Dual Highway.
"It has to be ratified, and we become the owners of the property," said Chad Hutchinson, a representative for VFC Partners.
The Delaware-registered corporation is made up of two investor groups based in Texas and California, he said.
The owners of the hotel, Watchwood LLC and Bahman Inc., defaulted under the terms of a 2006 financing agreement with Branch Banking and Trust Co. of Virginia, according to the sale notice.
"Nothing will change operationally at all" at the hotel, General Manager Michael Turner said Tuesday. "This is the last step in the process so they can own the real estate."
Once the purchase is ratified, the new owners would be free to retain or sell the property as they see fit, he said.
BB&T placed the property in receivership on Sept. 10, 2010, barring the owners from the property, Turner said last week. A California investment firm purchased the note on the property from the bank in December, he said.
Watchwood LLC bought the property from the late restaurateur and businessman Nick Giannaris in 2006 for $7.4 million. The property was scheduled for a foreclosure auction in August 2009, but the owners filed for Chapter 11 bankruptcy protection.
Chapter 11 documents filed at the time showed the owners owed the bank $5.5 million.