Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_15-cv-00031/USCOURTS-alsd-1_15-cv-00031-2/pdf.json

Nature of Suit Code: 140
Nature of Suit: Negotiable Instruments
Cause of Action: 28:1332 Diversity-Negotiable Instrument

---

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

FIDELITY BANK, )

 )

Plaintiff, )

)

v. ) CIVIL ACTION 15-0031-WS-M

 )

KEY HOTELS OF BREWTON, LLC, et al., )

 )

Defendants. )

ORDER

This matter comes before the Court on Defendants’ Status Report (doc. 25) filed on May 

11, 2015, as well as plaintiff’s Response (doc. 26) and defendants’ Reply (doc. 28) to same.

On April 13, 2015, the undersigned entered an Order (doc. 24) holding in abeyance 

Fidelity Bank’s Renewed Motion for Appointment of Receiver pending a status report by 

defendants to apprise the Court and opposing counsel of the progress of defendants’ ongoing 

efforts to secure Hilton franchise approval and funding for the Brewton hotel property that is the 

focal point of this litigation.

In their timely Status Report submitted last week, defendants, Key Hotels of Brewton, 

LLC, and Anand Patel, furnished specific facts detailing the present status of the franchising and 

loan applications. With regard to the potential Hilton franchise agreement, defendants document 

various meetings and site visits involving Hilton executives, identify the general contractor that 

Patel has selected as general contractor for the hotel project if and when Hilton agrees to flag the 

Brewton property as a Hampton Inn, and generally expresses confidence that a Hilton approval 

letter may be forthcoming “at any time.” On the financing side of the equation, defendants 

indicate that Patel is pursuing a loan application with Trustmark Bank, that all requested

documents and information have been submitted, and that Trustmark is simply awaiting Hilton 

approval of the franchise agreement before committing to the loan.

Plaintiff’s reaction to this Status Report is to propose that (a) the status quo remain in 

place for another 30 days, subject to (b) defendants providing weekly written reports to plaintiff 

Case 1:15-cv-00031-WS-M Document 29 Filed 05/18/15 Page 1 of 3
-2-

and (c) defendants submitting “a commitment letter from a reliable funding source within thirty 

(30) days with closing to occur not more than thirty (30) days after the obtaining of said 

commitment.” (Doc. 26, at 1-2.) Defendants agree to (a) and (b), but not (c), given the 

uncertainties of the timing of the Hilton franchise approval, which is a necessary prerequisite to 

Trustmark moving forward with the loan.

Upon review of these materials, the Court is satisfied that defendant Patel is working 

diligently and in good faith to procure the hotel franchise approval and financing that are needed 

to resuscitate the Brewton hotel property and repay defendants’ debt to plaintiff, Fidelity Bank. 

Moreover, all indications from the specific facts delineated in the Status Report are that 

defendants’ plans are neither far-fetched nor speculative. The Court has no reason to believe that 

defendants are acting for the purpose of delay, much less that they are simply forestalling the 

inevitable failure of the project, appointment of a receiver, and sale of the asset, potentially at a 

deep discount. Of course, it remains a possibility that those plans may not bear fruit. Hilton may 

not approve the franchise agreement or Trustmark Bank may not approve the loan; however,

both of those approval processes appear to be on track. Also of substantial importance, Fidelity 

Bank does not appear to be incurring incremental, additional harm at this time. Under the 

circumstances, the Court concurs with the parties that the status quo should remain in place for 

an additional 30 days, during which defendants should supply weekly written status reports to 

Fidelity Bank.

That said, the Court declines Fidelity Bank’s request that a rigid 30-day deadline be 

imposed for defendants to submit a “commitment letter from a reliable funding source.” Such an 

artificial, arbitrary requirement overlooks the practical realities of the situation. By all 

appearances, defendant Patel is doing everything he can to move the process forward, but certain 

timing-related factors are out of his control; therefore, imposing a mandatory deadline for Patel 

to obtain a written loan commitment appears unlikely to serve any constructive purpose, and 

could result in these proceedings suddenly devolving into a receivership outcome even on the 

cusp of a more favorable “win-win” result that could be achieved with just a little more patience. 

To be sure, this is a fluid situation that bears close monitoring to ensure no abuses by defendants 

and to safeguard plaintiff’s interests, and the Court has every intention of doing so. However, 

setting a firm deadline for a loan commitment letter would not promote those objectives at this 

time.

Case 1:15-cv-00031-WS-M Document 29 Filed 05/18/15 Page 2 of 3
-3-

For all of the foregoing reasons, it is ordered as follows:

1. Plaintiff’s Renewed Motion for Appointment of Receiver (doc. 13) will be held 

in abeyance for another 30 days, through and including June 17, 2015;

2. Defendants are ordered to file another status report updating the contents of the 

May 11 Status Report with a comparable level of detail and specificity (although, 

as before, the names of particular Hilton or Trustmark Bank contacts may be 

omitted) on or before June 17, 2015; and

3. In the interim, defendants are ordered to submit (but not file with the Clerk of 

Court) weekly written updates (in letter, facsimile or e-mail form) to Fidelity 

Bank, beginning on May 22, 2015, with additional updates to be due on May 29, 

2015; June 5, 2015; and June 12, 2015. Should Fidelity Bank believe that any 

information in those writings warrants judicial involvement prior to the June 17 

status report deadline, it may file an appropriate motion at any time after 

conferring in good faith with defendants to attempt to resolve the issue 

informally.

DONE and ORDERED this 18th day of May, 2015.

s/ WILLIAM H. STEELE 

CHIEF UNITED STATES DISTRICT JUDGE

Case 1:15-cv-00031-WS-M Document 29 Filed 05/18/15 Page 3 of 3