Bankrupt Country Inn of Berkeley Springs, W.Va. auctioned for $800K

Shuttered in May, key town hotel and spa to re-open under local ownership. Photo: Country Inn auction brochure

BERKELEY SPRINGS, W. Va., September 4, 2013 – Its doors shuttered since this past May 5, the bankrupt Country Inn in downtown Berkeley Springs, W. Va. was sold on August 28 to prominent local businessman Larry Omps and his family in an absolute auction of the 2.5 acre property. The final price tag was $800,000, with the new owners also agreeing to address the Inn’s local, state and Federal tax liabilities. 

The Country Inn had been owned by Nancy and Stjepan Sostaric who bought it from its previous owners in 2006. Those owners, too, found it difficult to get the historic property on a stronger financial footing. 

Night view of The Country Inn of Berkeley Springs, W. Va. Taken from recent auction brochure.

Not long after taking over the Inn, the Sostarics—who operated the facility through a separate entity registered as 5042 Holdings Ltd.—quickly ran into trouble as well as the Great Recession took hold, destroying real estate values nationwide and forcing potential visitors and tourists to cut back on vacation outlays.

The Inn steadily accumulated local and Federal tax delinquencies and ultimately sought protection under Chapter 11 bankruptcy regulations. After the filing, the business attempted to work out its tax issues while satisfying the concerns of its senior creditor, CNB Bank Inc., also headquartered in Berkeley Springs. Little progress was made. 

As a result, 5042 Holdings was forced to file Chapter 7 liquidation documents with the U.S. Bankruptcy Court of the Northern District of West Virginia, permitting the property’s assets to be sold to satisfy its debts, including over $2 million that it owed to CNB. 


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Located next to the tiny Berkeley Springs State Park in the center of Berkeley Springs, the Country Inn—which, like the park, taps into the town’s famous warm springs and offers a variety of spa services on the premises—is the most recent public accommodation to be erected on the downtown site which, like the town, was first surveyed by a youthful George Washington prior to the American revolution when the area was still part of the original colony of Virginia. 

Advertisement for last week’s absolute auction of The Country Inn, located in Berkeley Springs, W. Va.

The current building was erected in 1932 and opened as the Park View Inn, originally consisting of 65 rooms before a later expansion. Over the years the property was also known as the Country Inn and the Inn & Spa at Berkeley Springs before reverting back to its Country Inn identity after the 2006 sale. 

The new owners of the property, which includes additional houses on the site, are natives and longtime residents of Morgan County, the westernmost county in West Virginia’s Eastern Panhandle whose county seat is Berkeley Springs. The historic downtown of Berkeley Springs—an easy daytrip from the DC area—is also known by its original name, the Town of Bath, recalling the town’s origins as the nation’s first spa. 


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The Omps family is already familiar with the lodging business, and members still manage the Best Western hotel just south of the town on U.S. 522. Sources say that the family hopes to re-open the Country Inn, hopefully before the end of this year, as soon as they can establish a timetable. 

Like many small towns, Berkeley Springs, its residents and its businesses have suffered considerably since the onset of the Great Recession in late 2007. The shuttering of the Country Inn this past spring was another blow to the picturesque art town’s formerly robust downtown tourist trade, which typically peaks during its annual Columbus Day weekend Apple Butter Festival. Hopefully, the reopening of the Inn will provide a needed boost to the area economy.

 

Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.

Follow Terry on Twitter @terryp17

 


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Terry Ponick

Now writing on investing, politics, music, movies and theater for the Washington Times Communities, Terry was formerly the longtime music and culture critic for the Washington Times print edition (1994-2009) before moving online with Communities in 2010.  

 

 

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