January 11, 2013 / 12:35 AM / 5 years ago

CORRECTED-U.S. objects to MSR Resort bankruptcy plan

(Corrects to remove reference to Paulson in first paragraph, headline.)

Jan 10 (Reuters) - The United States government has objected to a bankruptcy reorganization plan that calls for the sale of MS R Resort hotel group to a Singapore sovereign wealth fund, s aying it is an attempt to dodge taxes.

The plan creates tax liabilities of $331 million with no recourse for the Internal Revenue Service (IRS) to recover them, Preet Bharara, U.S. attorney for the Southern District of New York, said in an objection filed on Wednesday.

Bharara also objected to MSR seeking an injunction that bars the government from reviewing the tax consequences of the plan.

The U.S. government has not had an opportunity to examine whether the plan is motivated solely to avoid taxes, which would disqualify it, Bharara said.

The Government of Singapore Investment Corp bid $1.5 billion for the hotels group, including the Arizona Biltmore Resort & Spa in Phoenix and Grand Wailea Resorts Hotel & Spa in Hawaii, in August. The hotel group is owned by the hedge fund Paulson & Co.

GIC is a sovereign wealth fund that manages Singapore’s foreign reserves and is a large real estate investor in the United States. The fund is a lender to MSR and made an offer shortly after the group filed for bankruptcy protection.

The hedge fund, headed by John Paulson, bought the hotels from a Morgan Stanley real estate fund in January 2011 and put them into bankruptcy a month later, saying it planned to reorganize them.

Morgan Stanley Real Estate purchased the five hotels and three others in 2007 for about $4 billion. The hotels filed with $2.2 billion in assets and $1.9 billion in debt.

The case is in Re: MSR Resort Golf Course, U.S. Bankruptcy Court, Southern District of New York, No. 11-10372. (Reporting by Tanya Agrawal in Bangalore; Editing by Sriraj Kalluvila)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below