Allerton Hotel owner files for bankruptcy

• Reprints

Updated: May 6, 2011 9:52PM

The owner of the Allerton Hotel, 701 N. Michigan, has filed for Chapter 11 protection as it tries to fend off a lender seeking to foreclose on the property.

The hotel will remain open and employees will continue to be paid, said the owner, an affiliate of Petra Capital Management LLC in New York. DiamondRock Hospitality Co., which owns a $69 million loan on the property, is trying to foreclose.

The bankruptcy filing “is designed to protect against hostile predatory actions by one secured creditor” that could hurt operations, said Neal Wolf, an attorney representing the hotel’s ownership.