The Pad, a bankrupt hotel and hostel in Silverthorne, will be sold to a Steamboat Springs investor for $10.1 million if a bankruptcy judge signs off on the deal.

This price is significantly lower than the cost of building The Pad: it is half the value determined last year and is far less than the amount The Pad still owes its largest lender.

The pad opened in November 2021 after 20 months of costly construction. It has 36 rooms and 101 beds, as well as meeting rooms, terraces with hot tubs and a stand-alone bar. Silverthorne-based couple Rob and Lynne Baer created the pad.

Construction was financed by a $12.3 million loan from Seattle-based BRMK Lending and $2.8 million from New York-based Lever Capital. When the Baers were unable to repay the debt, The Pad was placed into receivership last September. It went bankrupt the following month.

On August 15, Blue Rhino Investments agreed to pay $7.5 million for The Pad and assume $2.6 million of the leveraged loan. BRMK will receive $6.6 million from the sale – half of the $13.3 million The Pad owes BRMK and far less than the $18 million BRMK says it is owed..

BRMK and other companies waiting for money from The Pad have until Sept. 6 to object to the sale. BRMK’s spokesman and its attorney, Peter Murphy of the Denver law firm Markus Williams Young & Hunsicker, declined to say this week whether BRMK will object.

Blue Rhino, owned by Stephen Caragol, plans to hire the Baers to manage The Pad, according to court documents. Blue Rhino was a minority shareholder in The Pad, lawyers for the hotel and hostel told the bankruptcy court.

“The purchase agreement is the highest and best offer received,” they say, “and what the debtor believes to be the highest and best offer after extensive and thorough marketing.”

The Pad decided not to hire a broker, but “consulted Hilco Realty and CBRE,” it told U.S. Bankruptcy Court on Aug. 16. The Baers believe $10.1 million “is more than one would raise through a full marketing process (and) without the need to pay a commission.”

The Pad’s appeal is hampered by its uniqueness, it was told to the bankruptcy court, “as the majority of buyers want to buy traditional hotels, particularly a branded hotel with a franchise as opposed to an independent hotel” that is also a hostel. To make matters worse, revenues plummeted when a receiver ran the Pad “and are struggling to recover.”

In June, the last month for which the magazine reported its financials, The Pad reported revenue of $116,000 and expenses of $189,000. In May, it reported revenue of $130,000 and expenses of $110,000.

Dan Emert of Prime Investment Properties in Steamboat Springs acted as the buyer’s agent. He did not respond to requests for an interview with himself or Caragol this week.

The Pad was represented by bankruptcy attorneys Keri Riley and Jonathan Dickey of the Denver law firm Kutner Brinen Dickey Riley.

This story comes from BusinessDen.com.