Wyndham owner settles lawsuits with insurance company

Legal proceedings between the owner of the vacant Wyndham Springfield City Centre Hotel and the hotel's insurance company may be nearing resolution, but no details about what that resolution may look like have been made public.

The lawsuit between plaintiffs Full Service Hospitality LLC and Tower Capital Group — entities both associated with Wyndham owner Al Rajabi — and defendant Affiliated FM Insurance Co. has been reported as settled by the involved parties, according to an April 15 court filing with the Central District of Illinois.

The parties have until June 15 to file an official dismissal agreement, according to the filing. No details of the settlement were included with the filing.

The 370-room, 30-story Wyndham at 700 E. Adams St. in downtown Springfield was damaged by internal flooding on March 27 and has been closed since then. A string of allegations and lawsuits has followed the closing. Tower Capital Group and Full Service Hospitality filed a lawsuit in June in Springfield's U.S. District Court alleging Affiliated breached their contract by refusing to reimburse them for the damage to the hotel under the terms of their property policy.

In August, Affiliated filed a countersuit, alleging the vandalism that resulted in the water damage at the hotel was intentionally caused by Rajabi or that he colluded with others to cause the damage. In addition, the insurance company alleged that Rajabi filed a fraudulent claim for damages related to a purported March 14, 2024, lightning strike at the Wyndham. The countersuit alleged that the majority of the damage claimed by the hotel was not caused by a lightning strike but intentionally caused by Rajabi or by others with Rajabi's knowledge. Tower Capital and Full Service Hospitality denied these claims in a subsequent court filing.

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The report of the settlement of the lawsuit comes after Tower Capital filed for Chapter 11 bankruptcy in the Western District of Texas in March. Tower Capital stated in the filing it had liabilities of $7.68 million and total assets of $8.08 million, of which the Wyndham Springfield property accounted for the vast majority.

The city of Springfield is listed as a creditor in the bankruptcy, although the amount of the city's claim is listed as "unknown." Springfield-based E.L. Pruitt Co. filed a claim with the Sangamon County Recorder's Office on Jan. 6 stating that the company is owed $386,855 for temporary chiller and heating, ventilation and air-conditioning services provided at the Wyndham in October 2024.

Rajabi, who bought the Wyndham Springfield in a foreclosure sale in 2019, is general manager of San Antonio, Texas-based Tower Capital. According to the bankruptcy filing, Tower Capital reported business revenue of $6.16 million in 2024, then $1.65 million in 2025 after the hotel's closure. It reported no business revenue for the first part of 2026.

Attorneys representing Affiliated and the attorney representing Tower Capital in the bankruptcy did return a request for comment on the legal proceedings.

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