The Hallmark Scottish Inn in Arkansas City will go on the auction block April 24. The order of sale was issued in Cowley County District Court March 24 after the Washington Mutual Bank foreclosed against the motel at 1617 N. Summit St.
The court ruled defendants Rajwant K. Dhaliwal aka Rajwant K. Dhaliwaz, Rajwant K. Dhaliwal, dba R. K. Hallmark, Inc., and the U.S. Small Business Administration were notified of the process and either failed to answer the petition or agreed to the foreclosure.
Defendants Priyesh Patel and Minesh Patel did not receive personal service but voluntarily entered a limited appearance and have waived their redemption rights.
The hotel, which operated most recently as a Red Carpet Inn, has been closed for some time.
R.K. Hallmark and Dhaliwal were found in default on the note and guarantee. The bank was awarded personal judgment for $939,378.45 principal and interest, $3,594 accrued attorney’s fees and $619.18 court costs and titling fees for a total of $943,591.65, according to court documents.
Interest at the rate of 10.25 percent or $234.55 per day from Feb. 22 to the date of payment in full, plus other related costs, was also awarded to the bank.
Priyesh and Minesh Patel reached a separate agreement for the continued operation of the property as a going concern through the time of transfer of possession of the property after confirmation of the sheriff’s sale. In addition, the bank was granted the authority to retain new or continued management of the property to keep it marketable in anticipation of the sale.
Should the bank be the successful bidder at the sheriff’s sale, the bank will only have to pay in cash the costs of the action not previously paid, the unpaid real estate taxes, if any, and any priority lien. Taxes are due for 2007 for $18,489.28.
The auction will be at 10 a.m. in the front lobby of the county courthouse.