A Dallas-based hospitality firm has taken legal action against the bankruptcy estate of Saibaba Hotels LLC over the latter’s alleged unmet obligation to buy a North Texas hotel for more than $13 million.
Couture Hotel Corporation initially filed a lawsuit against Saibaba and its managing member, Ramakrishna Krothapalli, in 2019 following the Frisco-based entity’s failure to follow through on a $13.6 million Ten-X auction bid to buy the Wyndham Garden Inn at 2645 Lyndon B. Johnson Freeway, which Couture owned at the time.
In April of this year, Saibaba filed for Chapter 11 protection in an attempt to reorganize its business and restructure its debt to creditors, which prompted Couture to pursue legal recourse through the bankruptcy judge, The Real Deal reported.
The original suit, which was filed in the U.S. District Court of Dallas County, claims that “instead of abiding by the terms of the auction and fulfilling its duties under the contract,” Saibaba “[attempted] to negotiate a better deal,” which allegedly breached the sales agreement.
Since Saibaba attempted to negotiate, failed to execute documents, and did not make a down payment, the transaction was never completed, and the hotel was later sold in a foreclosure action for around $8 million.
By filing the lawsuit against Saibaba and Krothapalli and pursuing legal remedies through Saibaba’s bankruptcy proceedings, Couture hopes to secure the $7.6 million difference between the bid price and the sales price, along with 6% interest for 47 months, as well as other damages, injunctive relief, and related court costs, court records show.
“Saibaba perhaps believes that it can bid on open auctions in the state of Texas and skirt its obligations and responsibilities as a winning bidder. Texas law does not support such a stance; even a precursory glance at auction law in Texas should instruct Saibaba that it — and perhaps its agents — are liable for any attempt to renege on a winning bid for the hotel,” Couture claims in the lawsuit.
In response to Couture’s allegations, Krothapalli called the lawsuit “unwarranted,” noting that neither he nor anybody else ever signed a purchase and sale agreement, TRD reported.
“[Saibaba] could not secure the financing necessary to enter into the [agreement] and was left unable to acquire the Property,” Krothapalli said, per TRD.
Dallas-based law firm Carrington, Coleman, Sloman & Blumenthal is representing Saibaba in its legal dispute with Couture, also known as Hugh Black-St. Mary Enterprises.
The Dallas Express reached out to the law firm, but representatives were not immediately available for comment.
