MIDTOWN — A foreclosure auction for the Plaza Hotel scheduled for next month has been canceled after the hotel’s creditors reached a deal giving their borrowers more time to pay back a loan, according to a report in Bloomberg Business.
The owners of the Plaza Hotel’s mortgage, billionaire brothers and business partners David and Simon Reuben, had scheduled the auction for April 26, but backed off after striking the deal, a “person with knowledge of the matter” told Bloomberg.
The hotel’s ownership has been uncertain for years, with the Reubens becoming the latest creditors after they bought the hotel’s mortgage from the Bank of China. The purchase came after the majority owner, Sahara India Pariwar, defaulted on the loan, according to reports.
Sahara went bankrupt after principal Subrata Roy was arrested in India on fraud charges, according to reports.
The mortgage on the Plaza and the Dream Hotel, which Sahara also owns, is estimated to be worth about $500 million total, according to Bloomberg.
The Plaza has passed among property magnates in its 109-year history, with the hand-offs accelerating in the past 30 years. Donald Trump bought the palatial hotel in 1988, before passing it off to an investment group that included a Saudi Prince, according to Bloomberg.
The prince then handed it off to Israeli firm El Ad Group, which still holds a minority stake after unloading 75 percent of shares to Sahara for $800 million in 2012, according to news reports at the time. Sahara defaulted on its loans after Roy became ensnared in fraud charges in India, and the Reubens paid the face value $800 million on the Plaza’s debt to the Bank of China, according to news reports.
