McLemore Hotel
photo by Gail Perry
The borrower failed to make a required deposit to a debt service fund on municipal bonds sold to support the 245-room Cloudland hotel on Lookout Mountain, trustee Wilmigton Trust reported in an Securities and Exchange filing.
McLemore Resort Manager LLC has about $179 million of debt outstanding, Bloomberglaw.com reported.
McLemore officials said, “While there was a technical default - limited to the Cloudland Hotel bond financing and related to a scheduled reserve account deposit - debt service reserve funds remain in place, and bondholder payments are not affected.
"This situation was anticipated, and advance notice was provided to the trustee and bondholders months ago.
"Cloudland Hotel is now trending toward its original performance projections, and we remain confident in its long-term success.”
The upscale hotel opened last year and is part of Hilton’s Curio Collection. A second golf course is being built at the site.
The next interest payment is due in June.