Antelope Hospitality - Chapter 11 Case Summary

Business Description

Antelope Hospitality LLC ("Antelope" or the "Debtor") is an Arizona limited liability company based in Page, Arizona, that owns and operates a 133-room discount hotel and a restaurant/bar with a Series 11 liquor license. The property, located at 287 N. Lake Powell Blvd, was previously known as the "Quality Inn View of Lake Powell - Page" and is currently transitioning to independent operations as the "Scenic View Inn."

• The hotel is situated approximately one-half mile from the intersection of U.S. Route 89 and N. Lake Powell Blvd in Page, a small community with fewer than 7,500 residents that serves as a major tourism hub.
• The Debtor caters primarily to budget-friendly tourists visiting nearby national landmarks, including Antelope Canyon, the Glen Canyon National Recreation Area (home to Horseshoe Bend), Lake Powell, and the North and South Rims of the Grand Canyon.

The Debtor is owned by a group of experienced hotel and hospitality operators. Following a June 2024 equity infusion, the membership interest is divided among Ruchit Patel (9.5%), Suresh Patel (15.5%), Hasmukhbhai Patel (6.0%), Rajesh Patel (9.5%), Prahladbhai Patel (9.5%), Cosmos Software Consulting Inc. (10.0%), Deval Shah as Trustee (20.0%), and Amratbhai Patel (20.0%).

• The equity holders possess significant industry experience; for example, Deval Shah has a decade of hospitality experience, and other members own or operate various independent hotels, RV parks, and franchise locations such as Sleep Inn and Scenic View Inn in Utah.

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Corporate History

Antelope was formed in 2018 and acquired the hotel property in February 2019 for $8.675 million, paying approximately $1.775 million down. At the time of acquisition, the hotel was profitable, generating annual gross revenues between $2.5 million and $2.7 million.

Capital Infusion and Renovation

• In June 2024, the Debtor obtained a $1.07 million equity infusion in exchange for granting 50% of the membership interests to three new members: Hardik Shah (Cosmos Software Consulting Inc. Trust), Deval Shah (Devshah 401(k) Trust), and Amratbhai Patel.
• Throughout 2024, the Debtor completed a $300,000 renovation project, which included critical roof repairs that allowed the hotel to bring 30 rooms back online that had previously been out of service due to water leaks.

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Operations Overview

Historically, the Debtor operated the hotel under a franchise agreement with Choice Hotels, utilizing the "Quality Inn" flag. However, following the suspension of access to the Choice Hotels reservation system due to delinquent franchise fees, the Debtor is transitioning the property to independent operations under the name "Scenic View Inn."

• Transition Strategy: The Debtor is implementing a new property management system (PMS), establishing direct relationships with third-party booking websites, and launching an independent website. Consequently, the Debtor intends to reject the franchise agreement with Choice Hotels.
• Seasonality: The business is highly seasonal, with low occupancy during the winter months. The Debtor relies on peak seasons to sustain operations, noting that the current filing is necessary to bridge the gap until business increases in Spring 2026.

Management and Workforce

Day-to-day operations are managed by Deval Shah, while bookings and reservations are handled by Paras Patel and Hardik Shah. The Debtor pays a management fee of 3% of gross revenues to PHD Management LLC, an entity owned by Deval Shah, Hardik Shah, and Paras Patel.

• Employees: As of the Filing Date, the Debtor expects to retain approximately eight employees, including a general manager and staff for housekeeping, laundry, and maintenance.
• Payroll: The Debtor utilizes ADP for payroll services, with payments made bi-monthly.

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Prepetition Obligations

As of the Filing Date, the Debtor’s property is encumbered by approximately $9.67 million in secured debt. The Debtor reports holding $0 cash on hand at the time of filing. The prepetition capital structure includes:

Secured Debt

• First Utah Bank (1st Lien): Approximately $6,347,500 is outstanding under a loan secured by a first-position deed of trust and assignment of rents on the Property, as well as a first-priority blanket lien on all personal property.
• First Utah Bank (2nd Lien): Approximately 1,149,000 is outstanding under a January 2021 loan secured by a second-position deed of trust and assignment of rents, plus a blanket lien on personal property.
• SBA Loan (3rd Lien): Approximately $2,284,000 is outstanding under a January 2022 loan from the Small Business Administration, secured by a third-position deed of trust and a blanket lien on personal property.
• Real Property Tax Liens: The Property is subject to unpaid tax liens totaling approximately $176,870, of which roughly $41,000 is not due until March 2026.

Valuation and Employee Obligations

• Valuation: A January 2024 appraisal valued the Property at $10.04 million. However, the Debtor believes this appraisal overestimates the current value and asserts that the fair market value does not exceed the secured debt, likely leaving the SBA partially under-secured.
• Wages: Employees were paid through December 15, 2025. The Debtor is seeking authority to pay approximately $17,150 in pre-petition wages and benefits earned during the latter half of December 2025.

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Events Leading to Bankruptcy

Unprecedented Confluence of External Shocks

The Debtor’s financial distress was precipitated by a "crushing" series of events in 2025 that severely impacted tourism in the region, causing gross revenues to plummet to under $1.45 million for the period from January through November 2025.

• Wildfires: The Dragon Bravo fire, sparked by lightning in July 2025, burned over 145,000 acres near the North Rim of the Grand Canyon. The fire forced the closure of the North Rim for the remainder of the 2025 season and blanketed Page in thick smoke, driving a steep decline in tourism.
• Political Climate: Following the January 2025 presidential inauguration, the Debtor observed a substantial drop in international and domestic travel. This decline was attributed to fears regarding high-profile immigration enforcement, tighter entry restrictions, political boycotts, and negative international media coverage.

Defaults and Acceleration

Due to the revenue shortfall, the Debtor was unable to service its debt or maintain franchise payments.

• Franchise Default: On December 2, 2025, Choice Hotels notified the Debtor of a $187,374 past-due balance, suspended reservation services, and threatened agreement termination.
• Lender Acceleration: On December 10, 2025, First Utah Bank issued a notice of default regarding its first and second lien loans due to missed November payments and unpaid property taxes, threatening acceleration if not cured by December 30, 2025.

Faced with imminent foreclosure or receivership, the Debtor filed for Chapter 11 protection to preserve the hotel’s value as a going concern, transition to independent operations, and restructure its balance sheet.