Chequers Investment Associates v. Hotel Sierra Vista Ltd. Partnership

Chequers Investment Associates (“Chequers”) appeals the district court’s affirmance of a bankruptcy court order confirming Hotel Sierra Vista Limited Partnership’s (“HSVLP”) Chapter 11 plan for reorganization. Chequers asserts the district court erred in affirming: 1) the bankruptcy court’s conclusion that Chequers liens on hotel room revenues did not survive HSVLP’s Chapter 11 petition because Chequers failed to meet its burden for establishing its right to those revenues; and 2) the bankruptcy court’s or *431 der confirming HSVLP’s plan because the plan does not treat Chequers fairly and equitably. We have jurisdiction pursuant to 28 U.S.C. § 158 (b), and we reverse.

I

HSVLP built a 151-room hotel in Sierra Vista, Arizona, that opened for business in 1986 as a Ramada Inn franchise. Additional hotel facilities include a lounge, a restaurant, a ballroom, banquet rooms and meeting rooms.

HSVLP financed the hotel’s construction by borrowing a total of $6,196,000 in two secured loans from City Federal Savings and Loan (“City Federal”). HSVLP defaulted on its loans in 1990.

The Resolution Trust Corporation (“RTC”) became City Federal’s successor when City Federal became insolvent…