IRS Forcing Artisan Hotels to File Chapter 7
Douglas Da Silva planned on keeping both of his Artisan hotels when he filed for Chapter 11 bankruptcy in 2008, but now it looks like he might lose both.
News coverage by El Paso Inc shows that recent reports indicate the hotel is losing $30,000 a month, and has not filed proper tax returns. From the IRS motion:
The Artisan hotel in Las Vegas has already been sold at Chapter 7 bankruptcy auction to another group, and now the IRS is demanding the El Paso, Texas Artisan be put up for sale, too.
The IRS, which is at the top of the creditors list for the Texas hotel filed a motion in bankruptcy court to force the company to switch from Chapter 11 to Chapter 7. They claim that DaSilva is “mismanaging” the hotel.”
El Paso Inc. reports that documents filed by the IRS show the hotel is losing $30,000 a month, and has not filed the proper tax forms. The IRS motion says:
“Together these facts indicate both a continuing loss and an inability to rehabilitate the respective businesses.”
According to bankruptcy papers, the Artisan is already more than $7 million in debt, most of that unsecured debt to local businesses, utilities and the government.
And El Paso Inc. also has reports of employee paychecks bouncing. The restaurant’s former chef tells the Web site he quit the job after his last check bounced.
When all is said and done, there may not be much left to be reorganized and the Chapter 7 filing may take the day afterall.