In 2004, Gateway Hotel Partners reopened the St. Louis Renaissance Grand Hotel after a $265 million renovation. Investors hoped that the property, which opened to great fanfare in 1917, would benefit from recent urban renewal and attract convention revenues. But when the financial markets sank, so did the hotel's fortunes, and in 2009 it was sold to its sole bidder - the senior bondholders' trustee - for just $98 million. Was an opportunity lost? The hotel sat adjacent the America's Center convention complex, and St. Louis could boast three professional sports teams; a highly rated university and hospital, the corporate presence of Anheuser-Busch, Boeing, and Emerson; and a growing casino industry. In this case, students perform due diligence by reviewing financial documents from the hotel's trustees and post-bankruptcy activity in the hotel's senior bonds.
Case ID: 100308
Supplemental Materials: Teaching Slides