Texas Resort Avoids Foreclosure

West Texas Foreclosure News

Article Abstract:  The Lajitas Resort narrowly avoids foreclosure.  The resort is yet another victim of the Texas foreclosure crisis plauguing homeowners statewide. The West Texas resort owed more than $1 million dollars on a $12.5 million loan.  However, while the resort may have averted foreclosure, it is said that the resort had to file for bankruptcy. For the full West Texas foreclosure article, please continue reading below:
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A West Texas resort billed by its owner as an exclusive desert getaway for the rich and famous has filed for federal bankruptcy protection.

The eight-page filing in federal court in Midland on Monday came a day before a Connecticut real estate loan company was set to foreclose on an unpaid $12.5 million loan and sell at auction the 25,000-acre Lajitas, the Ultimate Hideout resort.

According to the Chapter 11 filing, Lajitas Resort Ltd. claims it owes more than $1 million to its top 20 largest unsecured creditors, including about $40,000 to the Golf Channel, a unit of Comcast Corp. (nasdaq: CMCSA - news - people ) The debt to Prime Assets Funding, the Greenwich, Conn., company that lent Lajitas the $12.5 million more than a year ago, was not listed in the filing.

Steve Smith, an Austin multimillionaire, bought the property at auction in 2000 for about $4.5 million. Smith did not return a cell phone message Monday.

Last year he told The Associated Press that his goal was to create a luxury resort that appealed to the extremely wealthy. The remote location would be part of the draw, he said. Lajitas sits on a rugged stretch of desert at the Mexican border between Big Bend Ranch State Park and Big Bend National Park and more than 250 miles from the nearest commercial airport.

The development plan included a golf course expansion, a state-of-the-art clubhouse, and a housing development that would eventually include about 1,000 high-end properties. The resort recently added daily flights from Austin and Dallas aboard a private plane. According to the Lajitas Web site, flights start at $399 a person.

Last year the resort had sold only five condominiums and fewer than a dozen homes.

Frank Harrison, a managing member of Prime Assets Funding, said he understood about $9 million worth of real estate had been sold at Lajitas, though he did not know how many homes and condos had been sold.

Harrison said his company made the loan to Lajitas last year presuming that it was a good investment. But after more than a year with no payments being made and no hope that the loan would be repaid, the company moved forward with plans to foreclose on the loan and sell the property at auction.

"I really just want to get my money back," Harrison said.

Harrison said the bankruptcy filing was not a surprise.

It's unclear what affect the bankruptcy filing will have on property owners in Lajitas.

By ALICIA A. CALDWELL 07.03.07, 12:41 PM ET

Article Source http://www.forbes.com/feeds/ap/2007/07/03/ap3881676.html