A Chapter 11 bankruptcy filing hasn't stopped a New York lender from seeking to foreclose against the owner of the former Hilton Pittsburgh.

In an emergency motion filed today in U.S. Bankruptcy Court in Pittsburgh, BlackRock Financial Management Inc. is asking a judge for permission to move ahead with the foreclosure against Shubh Hotels Pittsburgh LLC. Foreclosure proceedings started by BlackRock last week in Allegheny County Common Pleas Court were automatically stayed when Shubh filed for Chapter 11 bankruptcy protection on Tuesday.

U.S. Bankruptcy Judge Jeffery A. Deller has set a hearing on the request for Sept. 14.

In its motion seeking to foreclose, BlackRock argued that Shubh has no equity in the hotel and is "without the financial resources to provide the lender with adequate protection or to have a prospect of reorganization." It maintained that any further delay in foreclosing "will significantly erode the value of the lender's collateral." To the best of its information, Shubh has no cash with which to operate the property, BlackRock asserted.

BlackRock pointed out that Shubh had stated in a lawsuit filed in July in Common Pleas Court that it had a $49 million debt on the former Hilton property, one it said was worth $30 million. Shubh also stated then there were about $8.2 million in liens and judgments against the property resulting from unpaid bills.

Shubh attorney Jonathan Kamin could not immediately be reached for comment.

BlackRock filed in Common Pleas Court to foreclose after Hilton Hotels & Resorts terminated its franchise license agreement wih Shubh. As a result, the hotel lost the Hilton name and a place in the chain's reservation system.

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