Bankruptcy Trustee Sues General Partner in Radisson Hotel
The trustee for the partnership that developed the Radisson Hotel in Mission Valley has sued general partner Carrol Davis and others, claiming they fraudulently transferred more than $1.4 million in hotel assets to their private benefit in the year before the partnership’s 1985 filing for protection under the federal bankruptcy code.
The suit filed in U.S. Bankruptcy Court in San Diego alleges that Davis and associates Wayne Reeder and Frank Forster mounted a scheme to unlawfully use the then-insolvent hotel as collateral to finance Davis’ $800,000 acquisition of a controlling interest in Bingo Palace Inc. Bingo Palace is the general partner of San Diego Diversified Properties, the hotel developer.
In addition, the suit alleges that Davis arranged the fraudulent transfer of $498,864 in cash from the hotel to American Real Estate Advisors, a company the suit describes as a “conduit” for Davis, who it says was the “true recipient” of the funds.
According to the suit, Davis and his wife, Kerry, transferred $103,582 in hotel funds for their private use, including $3,800 for Mrs. Davis’ wedding ring and $2,561 for their 1985 wedding party. The couple also allegedly transferred furniture owned by the hotel to the couple’s Crown Point condominium and to their ranch in San Diego County.
The suit was filed by the attorney for Richard A. Peterson, trustee of San Diego Diversified Properties, a bankrupt partnership now in Chapter 7 liquidation proceedings.
Davis was unavailable for comment Thursday.
The 13-story, 264-room hotel was built with a $27-million loan from San Marino Savings & Loan and opened in 1983. The Federal Savings and Loan Insurance Corp. seized the insolvent S&L; in 1984 and then took control of the Radisson from Davis in June, 1985, after SDDP defaulted on loan payments.
The hotel is currently in escrow to be sold by the FSLIC to Mankato, Minn.- based hotel operator Petrie Development Co.
Davis was the owner-operator of the short-lived San Diego Playboy Club, which closed in July, 1982, after seven months of operation in Mission Valley. Leisure Systems, the Davis-controlled entity that owned the club in San Diego as well as a Playboy Club in Dallas, also filed bankruptcy proceedings.
