Hammons Inc., owner of hotels and convention centers across the country, including three properties in Arkansas, has filed for bankruptcy in response to an ongoing legal dispute with a one-time investor.
Chief Executive Officer Jacqueline Dowdy released a statement addressing the Chapter 11 bankruptcy filing and spoke with reporters Monday in Springfield, Mo., where John Q. Hammons Hotels & Resorts is located. Hammons Inc. owns convention center and hotel properties in Fort Smith, Hot Springs and Rogers.
"JQH is financially stable," Dowdy said, reading from a statement. "We want to ensure that the company Mr. Hammons built over 50 years and the financial and philanthropic commitments he made have the opportunity to continue to thrive. A financial restructuring associated with Chapter 11 will help to provide the necessary framework and safeguards to let us be there for our creditors, vendors, employees, guests and members of the community who benefit from the continued generosity of the legendary hotelier."
Fort Smith Catering Co. Inc., Hammons of Rogers Inc., Hot Springs Catering Co. Inc., JQH-Ft. Smith Development LLC, JQH-Rogers Convention Center Development LLC and Rogers ES Catering Co. Inc. are among more than 70 affiliates of the John Q. Hammons trust to seek protection. Debts and assets for the company, named for hotelier John Q. Hammons, are listed between $100 million and $500 million.
Hammons died in 2013. His companies and the John Q. Hammons Revocable Trust are involved in litigation stemming from a 2005 deal with Jonathan Eilian and Atrium Hotels LP. Hammons, according to Dowdy, agreed to sell a portfolio of 43 hotels owned by a publicly traded company for an eventual payment of $335 million. Eilian, according to reports, believed that he would have the right of first refusal to buy an additional 35 hotels.
That case was scheduled for Delaware's Court of Chancery in July. A bankruptcy filing will delay other legal proceedings.
Hammons employs about 4,000 people across the United States. The company's senior vice president and general counsel, Gregg Groves, said during the news conference that employees will continue to receive "payments and benefits." Video of the news conference was posted on the Springfield News-Leader website.
Hotels owned by the company are not expected to be affected. General managers at properties in Hot Springs and Rogers said they expected no change in operations.
Hot Springs Embassy Suites General Manager Kurt Schatzl referred questions to Hammons' corporate headquarters. Heather Sanders, general manager for the Courtyard Marriott in downtown Fort Smith, was out of the office until next week.
David Lang, general manager of the Embassy Suites in Rogers, said it is "business as usual" for the hotel and its approximately 285 employees.
"There are no solvency issues," Lang said. "The company is doing well and in better financial position than at any point in history. This is not going to affect employees or guests. It's purely a strategic move. Our guests will still see the same level of service."
Business on 06/28/2016