The company that owns the Holiday Inn Resort and Conference Center on Grand Island has

filed for Chapter 11 bankruptcy.

American Hospitality LLC bought the Holiday Inn in 2004. The property continues its regular

day-to-day operations.

The hotel, at 100 Whitehaven Road, was placed into receivership last month after a

foreclosure action by mortgage holder Royal Bank of Canada. The bank claims it is owed nearly

$7 million.

A management company is handling the daily operations of the 263-room hotel under a

contract. The property opened in 1972 and has a sweeping view of the Niagara River.

The bankruptcy filing by American Hospitality has put the foreclosure process on hold, said

K. Michael Sawicki, who was appointed receiver by State Supreme Court Justice Kevin Dillon

last month.

American Hospitality is seeking the removal of the receiver and the return of assets to

American Hospitality&#8217s control, a step that typically occurs after a bankruptcy filing,

with some exceptions. But the Royal Bank of Canada objects and is seeking to have Sawicki

retained as receiver.

The two sides appeared before U.S. Bankruptcy Court Judge Carl L. Bucki on Tuesday, but

they agreed to adjourn the hearing until May 25 as they attempt to reach an agreement. Sawicki

remains the receiver at least until then.

Arthur Baumeister, an attorney for American Hospitality, blamed the Holiday Inn&#8217s

financial woes on the severe downturn in the economy.

&#8220This company had shown above-average growth in income through 2007,&#8221 he said

after Tuesday&#8217s court appearance. But its revenues were down 15 percent in 2009, creating

a cash flow problem, he said.

Baumeister said the company has a plan to reorganize through bankruptcy. And he said

advance bookings are up &#8220substantially&#8221 from last year.