Holiday Inn Manhattan must pay default-rate interest on mortgage, court says

By Sarah Lizee

Olympia, Wash., Aug. 3 – Golden Seahorse LLC, which does business as Holiday Inn Manhattan Financial District, must pay default-rate interest on its mortgage in order to reinstate the loan as part of its Chapter 11 plan, judge Philip Bentley said in an opinion filed Wednesday with the U.S. Bankruptcy Court for the Southern District of New York.

As background, the debtor owns and operates a hotel in Manhattan that is subject to a 10-year mortgage at a fixed interest rate of about 5%.

In May 2020, the debtor defaulted on the mortgage by failing to make the required monthly payments, and the lenders accelerated the loan and began to charge interest at the contractual default rate, which is an additional 5%.

The debtor has filed a Chapter 11 plan that would reinstate the loan and treat it as unimpaired.

Before scheduling a vote or other proceedings on confirmation of that plan, the debtor and lenders asked the court to rule on whether the debtor is required to pay default-rate interest and fees, totaling about $20 million, as a condition of reinstatement.

The New York-based hotel operator filed Chapter 11 bankruptcy on Nov. 28, 2022 under case number 22-11582.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.