Eagle Hospitality Chapter 11 liquidation plan effective as of Dec. 28

By Sarah Lizee

Olympia, Wash., Dec. 29 – Eagle Hospitality Real Estate Investment Trust unit EHT US1, Inc.’s Chapter 11 plan of liquidation went into effect on Tuesday, according to a notice filed with the U.S. Bankruptcy Court for the District of Delaware.

The plan was confirmed on Dec. 20, as previously reported.

Following the closing of the sale of 14 of the debtors’ 15 hotel properties in June for gross proceeds of $481.9 million, the liquidating debtors, the official committee of unsecured creditors and prepetition agent Bank of America, NA engaged in discussions to formulate a Chapter 11 plan of liquidation for the distribution of the net sale proceeds to the debtors’ creditors and other stakeholders.

The negotiations ultimately resulted in the plan that incorporates a global settlement that reflects a good faith compromise and settlement of numerous inter-debtor, debtor-creditor, and intercreditor issues.

The plan settlement, which is conditioned upon the plan going effective on or before Dec. 31, provides for certain guaranteed minimum distributions on the effective date to prepetition agent Bank of America, NA on behalf of the prepetition lenders, and holders of other general unsecured claims and convenience claims against the debtor propcos.

There is the potential for additional recoveries post-effective date as well, the company said.

On the effective date, the prepetition agent will receive, on account of the prepetition lender claims, the guaranteed prepetition agent distribution in the amount of $360.16 million, beneficial interests in the liquidating trust which entitle the lenders to additional distributions on account of both liquidating trust interests, including the prepetition agent fee payment in the amount of $2.64 million, and post-petition default interest and post-petition charges.

Holders of other general unsecured claims against the debtor propcos will receive their pro rata share of the guaranteed other GUC distribution in the amount of $15.083 million and beneficial interests in the liquidating trust that entitle those holders to additional distributions from the liquidating trust propco assets.

Holders of convenience claims against the debtor propcos will receive a pro rata share of the convenience class distribution in the aggregate amount of $1.6 million.

Singapore-based Eagle Hospitality owns a portfolio of corporate, leisure and airport hotels across the United States. U.S. affiliate EHT US1 filed Chapter 11 bankruptcy on Jan. 18, 2021 under case number 21-10036.

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