The Rushmore Hotel’s Bankruptcy Gets It’s First Real Test in Court

RAPID CITY, S.D. — The Chapter 11 case of Tzadik Mount Rushmore Hotel, LLC went before a Florida bankruptcy judge Wednesday for a consolidated first-day hearing covering everything from payroll to critical vendor payments to a lender’s push to throw the case out entirely.

The hotel — doing business as the Rushmore Hotel & Suites filed for Chapter 11 protection on Aug. 13 in the U.S. Bankruptcy Court for the Southern District of Florida.

The case, No. 26-20751-MAM, was reassigned the following day to Judge Mindy A. Mora in West Palm Beach.

What was decided

The Aug. 26 hearing, held at 10 a.m. in Courtroom A of the Flagler Waterview Building, addressed a stack of first-day motions filed by the debtor over the preceding week:

• Cash collateral. The hotel’s request to continue using cash collateral on an interim basis, filed Aug. 18, is proceeding under a scheduling order rather than being resolved outright at this hearing.
• A possible scheduling conflict tied to a Jewish holiday was raised in court. A further hearing on interim use of cash and cash collateral is set for Sept. 9 at 2 p.m.
• Cash management. The debtor’s motion to maintain its existing bank accounts — three BankWest, Inc. accounts plus a debtor-in-possession account — was addressed.
• Under the arrangement discussed, funds sweep out of the accounts before balances reach $250,000, applying only to incoming revenue and ACH accounts, with sweeps occurring no less than weekly or upon hitting that threshold.
• Critical vendors. The debtor’s motion to pay critical vendor claims in the ordinary course of business was authorized by the court.
• Discussion at the hearing centered on the practical difficulty of finding comparable vendors in a market as small as Rapid City for the amounts the hotel owes — a factor weighing toward keeping existing vendor relationships current rather than risking a switch.
• Utilities and telecommunications. The debtor’s motion asking the court to determine that utility and telecom providers had been given adequate assurance of future payment was withdrawn without prejudice at the hearing, preserving the debtor’s ability to raise the issue again if needed.
• Prepetition wages. The court also had before it the debtor’s motion to authorize payment of prepetition wages for the Aug. 1–12 pay period. Court filings note that payroll was actually funded Aug. 18 — before the debtor had obtained authorization to pay it — which the debtor’s motion attributes to “an oversight.”
• The motion asks the court to bless that payment after the fact. The hotel employs 101 people: three salaried managers, 36 full-time hourly staff, 21 part-time hourly staff, and 41 seasonal hourly workers.

The bigger fight: a lender wants the case dismissed

Layered on top of the routine first-day matters is a more adversarial track. BankWest, Inc., the hotel’s secured lender, filed two emergency motions on Aug. 19: one seeking dismissal of the case under 11 U.S.C. § 1112(b), and one seeking relief from the automatic stay.

BankWest followed up Aug. 24 with a formal response opposing the debtor’s cash collateral motion. The debtor, in turn, filed a declaration from Adam Hendry on Aug. 25 in support of its first-day motions.

At the Aug. 26 hearing, counsel for BankWest stated that Tzadik Mount Rushmore Hotel filed for bankruptcy the day before a scheduled state-court receivership proceeding was set to take place — timing BankWest has pointed to in its motion to dismiss the case for bad faith.

Sourcing

This report is based on:

• Live audio coverage of the Aug. 26, 2026 hearing, In re Tzadik Mount Rushmore Hotel, LLC
• PACER docket, Case No. 26-20751-MAM, U.S. Bankruptcy Court, Southern District of Florida:
  • Doc. 9 — Order Granting Debtor’s Motion for Judicial Transfer of Chapter 11 Case (entered 8/14/26)
  • Doc. 13 — Emergency Motion to Use Cash Collateral, Finding That Secured Creditor Is Adequately Protected and Scheduling Final Hearing (filed 8/18/26)
  • Doc. 18 — Emergency Motion to Dismiss Case Under 11 U.S.C. § 1112(b), filed by BankWest, Inc. (filed 8/19/26)
  • Doc. 19 — Emergency Motion for Relief from Stay Under 11 U.S.C. § 362(d), filed by BankWest, Inc. (filed 8/19/26)
  • Doc. 20 — Declaration of Cattibrie Nichols in Support of BankWest, Inc.’s Emergency Motions (filed 8/19/26)
  • Doc. 24 — Debtor’s Motion for Authority to Pay Pre-Petition Wages, Salaries and Commissions, as of August 18, 2026 (filed 8/20/26)
  • Doc. 25 — Emergency Motion for Maintenance of Existing Bank Accounts (filed 8/21/26)
  • Doc. 26 — Emergency Motion for Entry of an Order Authorizing the Debtor to Pay Critical Vendor Claims (filed 8/21/26)
  • Doc. 27 — Expedited Motion for an Order Determining that Utility and Telecommunications Companies Have Been Provided with Adequate Assurance of Future Performance (filed 8/21/26)
  • Doc. 30 — BankWest, Inc.’s Response to Emergency Motion to Use Cash Collateral (filed 8/24/26)
  • Doc. 34 — Declaration of Adam Hendry in Support of First Day Motions (filed 8/25/26)

The withdrawal of Doc. 27 (utilities/telecom motion) without prejudice was reported live from the Aug. 26 hearing and confirmed by this outlet’s on-the-record coverage.

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