
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, May 12, 1993                   TAG: 9305120045
SECTION: BUSINESS                    PAGE: B6   EDITION: METRO 
SOURCE: GEORGE KEGLEY STAFF WRITER
DATELINE:                                 LENGTH: Medium

KRISCH LEFT DANGLING IN THE WIND

Krisch American Inns Inc. told shareholders Tuesday the company has received no answer to its proposal for financial restructuring from its lender, Westinghouse Credit Corp., and remains in danger of losing its 49 percent interest in a Virgin Islands resort.

Sam Krisch, the Roanoke-based hotel company's president, said Westinghouse Credit has not responded to the hotel firm's refinancing plan placed on the table in negotiations. Westinghouse is Krisch's lender and holds the remaining 51 percent interest in the Sugar Bay Plantation resort.

"I hope it will work out, but there is a possibility that we could lose the 49 percent interest," Krisch said.

The 300-room luxury hotel, franchised as a Holiday Inn Crowne Plaza resort when it opened in September, does not have enough cash flow to cover mortgage payments, Krisch told shareholders.

"We could hear any time, even today," he said.

Its interest in the $52.5 million resort is the only asset the public company owns.

"If it goes belly up, we can write our stocks off," said Emmett Greeley, a retired Norfolk Southern Corp. accountant.

The resort had "a pretty good first season," but its performance was poor, mirroring the general condition of the hotel industry, Krisch said. Occupancy at Sugar Bay Plantation was 63 percent in January, rising to nearly 70 percent in February and March and back to 50 percent in April, he said.

The last few years have not been profitable for the lodging industry, Krisch said. Occupancy has been soft and room rates are down.

Another stockholder, who did not give his name, said that following the performance of Krisch American and the several related privately held companies "is like finding a needle in a haystack and we're the needle."

Krisch's general reply when pressed by critical stockholders was that the company's problems are in line with the rest of the industry.

Last year, Krisch American turned over its interest in a dozen unprofitable motels to Westinghouse Credit.

Krisch Realty, a private company, owns the Holiday Inn in Salem, the only Roanoke Valley motel property of the various Krisch interests. Krisch Hotels, a management firm, manages the Holiday Inn-Central on Franklin Road, Holiday Inn-Civic Center and Holiday Inn-Airport for Westinghouse Credit, the owner.

At the end of last year, Krisch Hotels forgave Krisch American's management fees of $2.4 million, dating back to 1986, Krisch said.

In its most recent financial report, Krisch American said it lost $1.1 million, or 19 cents a share, last year, an improvement from its 1991 loss of $2.1 million or 35 cents per share. However, sales dropped from $7.3 million to $2.9 million.

The stockholders re-elected as directors Krisch; Joel Krisch, chairman; Ben Richardson, senior vice president, general counsel and secretary; Brady L. Sheffer, senior vice president/finance; and Thomas Lynch, first vice president of a Pittsburgh stock brokerage.

by CNB