Souki, Lenders Near Resolution

A yearlong bankruptcy case that saw the auctioning of Aspen Valley Ranch will close after funds are dispersed from a sell-off of some commercial properties downtown, lawyers said last week.

Their comments were made on Thursday during a status conference in which they updated a Houston bankruptcy judge on the progress of their discussions over how to resolve the remaining disagreements between businessman Charif Souki, who lives in Aspen and Houston, and a group of secured lenders and underwriters.

The conference came after a June 27 hearing when the lending group’s counsel said they would object to a sale unless the lenders understood the deal’s terms and were guaranteed proceeds from the transaction. Lawyers for Souki, however, weren’t exactly agreeable to that arrangement at the time. 

The properties were under contract for $70 million then to developer Mark Hunt, based on remarks at last month’s hearing and according to people knowledgeable about the deal. Considering his Aspen commercial assets and residential property in unincorporated Pitkin County, Hunt owns more than 200,000 square feet of local real estate. 

The mood, however, was different at last week’s hearing following out-of-court negotiations between the parties.

“It has been mountains that have been moved, to be honest, ” Joshua Wolfshohl, a Houston lawyer representing Souki, told the judge. “And the fact that at least the economic terms have been agreed to at this point is an enormous development and if the sale closes and everything funds, it would be a global resolution … and we’re done.”

“We do have a complete agreement on the economics (of the settlement),” said Laura Metzger, counsel for the lending group, at the hearing. “And the entire settlement hinges on that cash coming in, so we are aligned with our counterparties and adversaries in getting that sale done. We’re working through how we all get together and work together after so many years of working apart.”

There was no mention of escrow or monetary figures at the hearing. 

Souki and some of his family members — as well as corporate entities and affiliates that they control or own majority stakes in — have been on one side of the dispute. They also own and control AVR AH LLC and Strudel Holdings LLC, both of which declared bankruptcy in July 2023. Those two LLCs were the ranch’s owner of record before it sold at a bankruptcy auction last fall.

The group of lenders has accused Souki of balking on personal loans he received in the amounts of $50 million in April 2017 and $70 million in March 2018. The sale of Aspen Valley Ranch, which Souki developed into a family retreat with luxury homes, brought in $30.5 million. That amount was applied to a $100 million judgment the lenders were awarded in the bankruptcy matter.

In recent court filings, the lending group said the balance due was $92.5 million. Souki also pledged 50% of Ajax Holdings, an Aspen-based real estate investment firm, as collateral for the loans.

Ajax Holdings owns the following properties, or parts of them, that would be sold to Hunt.

• 410 E. Hyman Ave. — 2,668 square feet of residential space with five bedrooms and five bathrooms and 7,880 square feet of retail/commercial space.

• 426 E. Hyman Ave. — 2,040 square feet of residential space with three bedrooms and two bathrooms, and 7,680 square feet of retail space.

• 514 E. Hyman Ave. — 7,933-square-feet of commercial space, anchored by the offices of Coldwell Banker Mason Morse, a franchise business owned by Ajax Holdings.

• 415 E. Hyman Ave., unit 16, Roaring Fork Condominiums — 3,588 square feet.

• 419 E. Hyman Ave., unit 5, Paragon Building — 1,930 square feet. 

• 617 E. Cooper Ave., unit B, Aspen Square building — 4,072 square feet.

The actual value of those properties, which are residential and commercial, is collectively $67 million, according to the Pitkin County Assessor’s Office.

The lending group comprises Nineteen77 Capital Solutions of New York, Bermudez Mutuari Ltd. of the Cayman Islands, Chicago-based UBS O’Connor LLC and Delaware-based Wilmington Trust National Association.