News & Resources

Motel owner struggles with outstanding tax dues

Oct 17, 2011 Mike Garretson

In an effort reflective of the recent debt collection scramble by governments across the country, the city of Santa Cruz, California, is leaning on one motel operator for an estimated $1 million in outstanding lodging taxes. Lawyers representing the city and the motel owner will meet this week to determine whether liens on the motel will continue as the owner, Manuben Patel, reorganizes her debt. Patel also owned and operated a Monterey inn until it was foreclosed on last month and recouped by the primary deed holder. "Attorneys for the city will meet with Sabrina Patel's other creditors Friday now that her case has been converted to a Chapter 7 liquidation," the Silicon Valley Mercury News reports. "Cooper said Manuben Patel doesn't intend to pursue liquidation and may eventually drop her Chapter 11 case because she still owns Motel Santa Cruz." Both commercial and residential real estate have floundered since the recession began. While commercial investments have improved slightly in recent months, a survey of FICO bankers published last month concluded the housing sector may take a decade to fully recover.