Another 21 Shilos Seek Bankruptcy Protection

PORTLAND-Another 21 Shilo Inns sought protection from creditors this week under Chapter 11 of the U.S. Bankruptcy Code, bringing the total to 27 of the chain’s 46 hotels.

The chain is owned by hotelier Mark Hemstreet and operated by Hemstreet’s Shilo Management Corp. Hemstreet is attempting to reorganize following a six-month lull in the industry that began Sept. 11 and created quite a cash crunch for many hotel operators. It is not yet know how many hotels, if any, will be sold off in order to meet creditors’ demands, whose lawsuits forced the filings.

Hemstreet operates 46 Shilo Inns in nine western states. Twenty of the hotels are located in Oregon, with another 21 divided evenly among Washington, California and Idaho. The remaining five locations are located in Montana, Wyoming, Nevada and Arizona. For the hotels not in Chapter 11 it is believed Hemstreet was able to come to a repayment agreement with their lenders. Lenders for some of the other hotels have filed complaints in court claiming they have not received mortgage payments for several months.