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GIC reaches agreement with Paulson & Co. over hotel assets

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Government of Singapore Investment Corp. (GIC) has reached a settlement with MSR Resorts, a hotel group owned by hedge fund Paulson & Co. Under the settlement, which was approved by a US bankruptcy court judge on Tuesday, GIC will cease its near-term pursuit of MSR in return for financial compensation, Reuters reported.

GIC, another of MSR's creditors, made an offer for the hotel group just days after it filed for bankruptcy. The sovereign wealth fund took action because it was unhappy with Paulson & Co's request for more time to restructure the company. The hedge fund acquired the hotels, which include the Doral Golf Resort & Spa in Miami, from Morgan Stanley in January in a foreclosure auction and then filed for bankruptcy protection for them as a means of buying time to restructure the assets.

GIC has given MSR until September 1, 2012, to put a bankruptcy plan in place. If the hotel group can pay off its creditors, Paulson & Co. will remain owner post-bankruptcy, and it has agreed to pay GIC in full in cash. If the bankruptcy plan fails, the assets will be put up for auction.

Five Mile Capital, which owns junior debt in MSR, was part of the settlement. Paulson & Co. told the court that it was in discussions with other creditors regarding the restructuring plan.

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