Imperial Palms Resort sold
HOLTVILLE — The Imperial Palms Resort is under new ownership as a result of a recent bank foreclosure and sale of the property.
Plans are underway for the new ownership to announce its acquisition of the iconic property in the coming days.
The resort’s recent foreclosure and sale caps a tumultuous three years for its previous owner, Daniel Chiu, who struggled to manage the resort’s 18-hole golf course, restaurant, bar and grill, banquet hall and 104-room hotel.
“At the beginning, I went into the project with more heart than financial sense and did not do my due diligence,” Chiu said.
During his management of the resort, Chiu said he learned a lot about the hospitality business and how to conduct himself professionally.
He also expressed thanks for the local support and assistance he had received through the years, as well as some regret.
“I lost major, major money,” Chiu said. “It has put me in a difficult financial situation.”
The free trade zone that Chiu established at the resort will likely be moved to either Calexico or El Centro as a result of his dissociation with the property, he said.
The foreclosed property was sold at a private auction on May 21 for about $344,000 by the lending institution that bankruptcy filings state was owed more than $2.3 million by Chiu’s company, Imperial Palms Resort, LLC.
The hotel and resort had fallen on tough financial times in recent years, prompting Chiu to file for Chapter 11 bankruptcy in August.
That bankruptcy case, which was converted to a Chapter 7 case in early May, had ultimately been dismissed May 9 in response to an emergency motion submitted by the trustee overseeing the case.
The case’s dismissal was sought by Chiu to allow two large-scale events to be held at the resort in mid-May without any hindrance by the bankruptcy case, court documents stated.
“In order to avoid significant inconvenience, harm, unfairness, and resulting damage from canceling these events, I present this emergency motion to dismiss the bankruptcy case so that the Debtor can conduct the graduation and the prom outside of the bankruptcy case,” stated Trustee James L. Kennedy.
Bankruptcy filings had disclosed the resort had more than $8.7 million in liabilities, and owed about $839,000 in federal income and payroll taxes.
The bankruptcy case’s dismissal did not result in any payments to secured creditors, including the approximate $150,000 owed to former resort co-owner Darryl “Dee” Readshaw.
A federal lawsuit against Chiu seeking to recoup his investment remains pending, Readshaw said.
The new owners are identified as BWR, LLC, according to the property’s trustee deed of sale on file with the county Clerk-Recorder’s Office.
BWR, LLC is identified as having registered with the California Secretary of State on May 23, and lists former resort co-owner Kevin Smith as its agent.
Smith, a secured creditor in the bankruptcy case who was also owed about $250,000 by Chiu, said he was glad by the resort’s recent foreclosure and sale.
“I’m glad we don’t have any Chius involved,” Smith said, referring to Chiu and his wife Rebecca, also a principal of Imperial Palms Resort, LLC.
Smith and Readshaw had sold their stake in the resort to the Chius in mid-2015, after having acquired it themselves in August 2011 and investing heavily in its remodeling.
Currently, the resort’s hotel remains closed, as does Caddy’s Sports Tavern, pending the approval of its liquor license. Its golf course remains open to the public, an employee said.
Chiu’s legal and financial troubles had also extended beyond those associated with the golf resort.
Previously, he had unsuccessfully petitioned for bankruptcy protection for his TownCenter Plaza development in Calexico, which owed creditors more than $12.5 million. That property was also foreclosed upon.
Also, a hearing is scheduled next week for a county Superior Court civil case alleging the empty Imperial hotel located at Highway 86 and Neckel Road is a “$38 million scheme of embezzlement and fraud” perpetrated by Daniel and Rebecca Chiu’s San Marino-based Oasis Growth Partners, LLC.
An amended civil case was filed in March by an investor who alleges defendants embezzled nearly $29 million from Chinese immigrants who invested in the Chius subsidiary limited partnerships as part of the EB-5 program.
“Daniel Chiu was the face, front-man and shill for this criminal profiteering enterprise,” the civil court complaint stated.
Although Chiu declined to comment specifically about the civil case’s allegations, he did speak in general terms about the EB-5 program, which grants foreign nationals temporary visas in exchange for investments of either $500,000 or $1 million in approved development projects, called Regional Centers.
The lawsuit contends that the Chius created a series of “shell companies” from which they comingled, withdrew and embezzled tens of millions of dollars.
Participants in the EB-5 program cannot be guaranteed a return on their investments, he said.
“The main issue is whether they get the green card or not,” he said. “The only time an investor should claim fraud is when they didn’t get their visas.”
The shuttered hotel is also currently being foreclosed on as a result of Oasis Growth Partners owing its trustee more than $1 million and is scheduled to be privately auctioned on July 20 at the El Centro courthouse’s steps.
The property previously was scheduled for private auction in May but had been postponed, according to the Nationwide Posting and Publication website, which specializes in services to the mortgage default industry.
The property has languished on account of Chiu’s inability to pay for necessary utility upgrades.