Grand Wailea sold at foreclosure auction

Maui's Grand Wailea Resort Hotel and Spa has new owners following a sale of eight U.S. luxury resorts in a foreclosure auction in New York yesterday.

Lenders including Paulson & Co., Winthrop Realty Trust and Capital Trust Inc. seized control of the eight properties from Morgan Stanley's real estate funds at the auction.

The investors held junior debt that helped finance Morgan Stanley's 2007 acquisition of CNL Hotels & Resorts Inc. for $6.7 billion, positioning them to foreclose on the equity ownership after Morgan Stanley defaulted on the debt.

The Paulson group now will negotiate with the trustees overseeing a $1 billion securitized mortgage on the lodging properties, according to David Broderick, a partner with Allen & Overy LLP, who represents the winning investors.

"The plan is to speak to all of the senior creditors and restructure all of the debt," Broderick said after the auction.

The mortgage and about $500 million of senior debt come due Tuesday, according to data compiled by Bloomberg.

Three of the CNL resorts are in Florida, two are in California, two are in Arizona and one is in Hawaii.