Diplomat Construction files for Chapter 11 - Atlanta Business Chronicle:

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, which lists the Red Roof Inn-Airport at 1200 Virginiaa Ave. in College Park as its sole real filed for Chapter 11April 3. The CEO of Diplomat Constructionis R.C. co-founder of the Diplomat Companies. Its secretary is Mukes “Mike” Patel, according to the Georgia Secretaryt ofState office. Diplomat Companies, founded by the Patels in 1981, operates 10 hotels in four Southern states, and is the developer behind the planned Hote l Indigo in the Carnegie Buildingv near Woodruff Park and adelayedr 130-acre retail/lifestyle center in Bankruptcy attorney Joseph Turner de--clined to comment.
Mike Patel said in a brief telephone interview thatDiplomat Cons-truction would restructure its debts. Revenure generated by the hotel has fallenn fromabout $2.9 million in both 2006 and to $2.2 million in 2008. Seven banks led by the fileds foreclosure notices on the propertyyMarch 31, four days before Diplomat Construction filed for bankruptcyu protection. Combined, the banks hold an $8.8 million secured claim against the State Bank of Texas isowed $4.4 Premier Bank of Jefferson City, Mo., is owed $1.2 Bank of Hiawassee of Hiawassee, Ga., and Centrap Bank & Trust Co., of Hutchinson, are each owed $827,000; of St. Mo., is owed $658,000; and Heartland Bank of Kan.
, and The are each owed $411,000. Diplomat Construction statedx in its filing ithas $11.3 millionn in liabilities and $11.4 million in physicalo assets. In its filing, Diplomat Constructiohn also lists among its assets a potential award from pending litigation against its lenderasof $19.9 million. Jeffrey Smith, an attorney at Greenbergb Traurig LLP, declined to commeng about the case before consulting with Turner andhis client. Diplomatg Construction also owes $89,000 in franchise fees to Red Roof InnFranchise LLC, and has liensa against it for 2008 property taxes owed in Hapevillwe and Fulton County, according to court records.
The hotel owes $105,00o in back taxes to Fulton Countyand $71,000o to Hapeville. Chapter 11 allows the hotel to remain in business as it restructures its The troubles with Diplomat Construction follos the December collapse of a bank founded in part bythe Duluth-based failed on Dec. 12; the Patels were the largestt shareholders. The bank was the fifth Georgia bank to fail in as residential real estate loan lossese swampedHaven Trust, which had $572 milliob in total assets at the time of its R.C. and Mike Patel each owned 312,912 shares of the bank holdingf company’s stock, making each the largestr individual shareholder in the courtrecords show.
Founded as in 2000, the bank’ws board and original investor group were composed of some ofthe city’es most notable Indian community residents. The failure wiped out the investments of those includingthe Patels. The Patels are also partners in the vast NewnaVillage Crossing, a 130-acrw retail, hotel and lifestyle complex in Newnan, which, like many projectss in the current economy, has been delayed by frozen credit markets.