The owners of the convention center in Texarkana, Ark., filed for bankruptcy last week.
Dr. Hiren Patel and his wife, Nila, filed for chapter 11 bankruptcy Friday in a Texas federal bankruptcy court. The convention center’s management company, Texarkana Hotels, LLC, which is owned by Dr. Patel, filed for chapter 11 bankruptcy the day before.
The bankruptcy filings mean proceedings in MidSouth Bank’s suit to foreclose on the property for default on about $10 million in outstanding debt are stayed. Two loans MidSouth made to Texarkana Hotels in 2012 for construction of the convention center are personally guaranteed by the Patels, meaning they could be held individually liable for the debt.
Such was the case last month in Bowie County. A judgment awarding MidSouth close to $3 million for unpaid loans for Texarkana, Texas, hotel Country Inn & Suites was signed in March by 202nd District Judge Leon Pesek, Jr.
The hotel’s management company, Krishna Associates, filed for bankruptcy last year hours before the bank was scheduled to auction the property on the steps of the county courthouse in New Boston, Texas. While that meant MidSouth was unable to foreclose on the real estate, it did not stop it from taking action against the Patels, who had personally guaranteed the loans and had not filed for personal bankruptcy until Friday in federal bankruptcy court.
The pending bankruptcy means the bank cannot pursue the Patels’ personal property to satisfy the outstanding Texas judgment or continue with foreclosure of the convention center without permission from the federal bankruptcy court.