Hotel Laguna Portfolio – Facing Severe Challenges

A $360 million hotel portfolio in CA, including the well-known Hotel Laguna, is currently stuck in a legal dispute that’s delaying its sale and raising concerns for lenders and investors.

Hotel Laguna, originally built in the 1930s

Owners in Disagreement

The portfolio is held under MOM CA Investco LLC, a company tied to the two key players, Mohammad Honarkar and Mahender Makhijani. Their different views on how to manage and control the portfolio have slowed down the sale process. 

A $195 million loan backs the portfolio, and it also features multiple vacation rentals in Laguna Beach, an apartment complex valued at $65 million in the Inland Empire, and properties in Los Angeles’ Koreatown.

Because of the dispute, the lender behind the portfolio has threatened foreclosure. If the lender moves forward, the properties could be sold through a trustee sale – a public auction used to recover money owed on the loan. This type of sale is common in CA and usually results in the property selling below market value.

What’s Next?

The legal case is still ongoing, and the owners have filed for Chapter 11 bankruptcy – a way for a company to reorganize its debts and keep operating while trying to reach an agreement with creditors.

The court may dismiss the bankruptcy case, which would allow the lender to move forward with a trustee sale. Or, the case could shift toward liquidation, which means selling off the assets through the court to pay back all creditors.