The famed Plaza Hotel and the Dream Downtown in New York City are expected to be auctioned off at foreclosure on April 26 by the mortgage holders, billionaire brother David and Simon Reuben, according to a Bloomberg report.
The move will serve to end a two-year ordeal over the state of the hotels’ ownership after current majority owner Subrata Roy of Sahara India Pariwar went to jail in India for defrauding investors.
Saudi Prince Alwaleed’s Kingdom Holding Co. still holds a minority stake in the Plaza along with hotelier Sant Singh Chatwal. Kingdom Hotel Investments CEO Sarmad Zok told HOTELS on Thursday, “We will not give up on the Plaza, which we have owned for almost two decades, and plan on being the constant factor in this going forward.”
The Reubens bought the loan from Bank of China Ltd. after a default by Sahara last year. The two hotels serve as collateral for the Bank of China loan and are cross-collateralized with the Grosvenor House hotel in London. The Dream hotel is owned by Sahara’s Roy and Chatwal. The combined mortgages for the New York properties total about US$500 million, according to the Bloomberg report citing a person with knowledge of the matter.