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Manchin, Puccio listed in company’s $15M debt complaint

Bloomberg file photo
Sen. Joe Manchin, D-W.Va.
Gazette-Mail file photo
Larry Puccio enters Gov. Jim Justice’s inauguration in January. Puccio, a Fairmont native served as Gov. Joe Manchin’s chief of staff and worked for Justice as a senior advisor during his campaign.

A trustee for a real estate company requested last week that a firm with ties to U.S. Sen. Joe Manchin be declared in default of a $14.6 million debt and for someone to be appointed to oversee the firm temporarily.

The U.S. Bank National Association lodged a complaint against Mountain Blue Hotel Group, a Georgia limited liability company based out of Fairmont, West Virginia, in U.S. District Court for the Northern District of West Virginia.

According to the complaint, “AA Property LLC” is one of 10 partners in the hotel group. It goes on to state AA Property is a West Virginia limited liability company comprised of Manchin, D-W.Va., and Democratic party operative Larry Puccio.

Jon Kott, a spokesman for Manchin, initially denied Manchin’s ties AA Property in an emailed statement.

“Senator Manchin and Larry Puccio have no affiliation or stake in AA Property Group and no ownership interest or stock in Mountain Blue Hotel Group or the Hilton Garden Inn,” he said.

According to Manchin’s 2016 financial disclosure with the Senate, filed in mid-May, he owns between $50,000 and $100,000 of equity in “AA Properties LLC” and earned $11,000 in income from it. AA Properties is also listed as based out of Fairmont.

Later, Kott said in another email Manchin has partial ownership in AA Properties, but AA Properties has no ownership or affiliation with the hotels.

Puccio also initially denied any ties to AA Property, AA Properties or the hotel group.

“I have no ownership in AA Properties, I have no ownership in Mountain Blue whatever, I have no stock, I have no ownership, and I have no affiliation with them,” he said.

However, after speaking with his attorney, Puccio said he does have ownership in AA Property, though that company has no affiliation with the hotel group. He said he incorrectly thought the company had been dissolved before making his first comment.

According to a filing with the Secretary of State’s office, updated in June, Puccio is an officer with AA Property, which is listed as a real estate, rental and leasing firm.

In an email Tuesday, Kott confirmed AA Property and AA Properties are the same firm.

Timothy P. Palmer, an attorney for the plaintiff, declined to comment for this report.

The suit states the hotel group owns a Hilton Garden Inn located in the Suncrest Town Center in Morgantown, West Virginia. In 2013, the original lender, UBS Real Estate Securities Inc., made a $15.4 million loan to the company.

In April of 2017, Hilton notified the company it failed to pay more than $235,000 in royalties under the franchise agreement, which was set for termination in May. However, the lender advanced the hotel group the required funds. Though the lender demanded repayment, none has been received, according to the suit.

Additionally, between June 2015 and May 2017, the state of West Virginia filed tax liens against the property totaling more than $437,000. The lender continued to extend its loans to the company to cover payroll and other operating expenses due to cash flow issues, according to the suit.

“As of June 12, 2017, the principal balance due and owing under the loan documents is $14,559,226.84,” the complaint reads.

Offering supporting evidence for the appointment of someone to temporarily oversee the firm, the suit lists the failure to pay franchise fees, state taxes, county hotel taxes, cash flow problems, payroll issues, a thus-unfulfilled loan request for operating expenses and a failure to submit updated payroll information as proof the company should hire a receiver.

Reach Jake Zuckerman at jake.zuckerman@wvgazettemail.com, 304-348-4814 or @jake_zuckerman on Twitter.

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