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A lawsuit has been filed in Shelby Circuit Court by the Federal Deposit Insurance Corporation (FCIC) against JMG Hospitality LLC, the former owners of the hotel formerly known as the Holiday Inn Express, now operating as Ritz Inn and Suites. The court granted a motion on Sept. 14 to appoint a receiver in the suit. Greg Berman, attorney for the FDIC, said a receiver “is somebody that the court appoints to go in and protect the assets of the business and to make sure that money isn’t squandered.” The suit said that as of Sept. 9, 2008, JMG owes the FDIC in excess of $2,6 million and is also delinquent on property taxes. “As a consequence of JMG’s failure to make the required regular payments, failure to maintain property insurance on the hotel, and failure to pay the required Tourism Room Tax, among other reasons, JMG is in breach of the loan documents as set forth in the complaint,” the suit says. Robert L. Cole of the Coleman Group was appointed to act as receiver of the Holiday Inn Real Estate and related collateral to ensure that it is properly maintained and secured, the suit says. The hotel, which is one of Shelby County’s largest, with 88 rooms, was shut down for about two weeks shortly before the Shelby County Horse Show. At that time, an employee at the hotel told a reporter that staff members were told strictly not to talk to The Sentinel-News. Employees said they had been left in the dark about why the hotel was closed or when it would reopen. The hotel has closed several times during the past few months, once by the Kentucky Department of Revenue for unpaid taxes. Holiday Inn dropped the hotel’s affiliation when it did not receive payment. The Sentinel-News was unable to contact JMG Hospitality, and Berman said he was also unable to get in touch with them. “If you reach them, let me know,” he told a reporter. An employee at the hotel called the newspaper Tuesday afternoon but would not give her name and only described herself as the general manager.
“The former owners have a restraining order against them and can’t come on the property,” she said. “We’re doing everything we can to turn this place around. All our bills and payroll are paid.”