Eagle Hospitality exclusivity motion draws objection from committee, BofA

By Sarah Lizee

Olympia, Wash., Sept. 24 – Eagle Hospitality Real Estate Investment Trust unit EHT US1, Inc.’s official committee of unsecured creditors and pre-petition administrative agent and lender Bank of America, NA objected Thursday to the company’s motion seeking a second extension of its exclusive periods to file and solicit votes on a Chapter 11 plan, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

The group called the lack of advancement on a plan of liquidation that maximize recoveries for unsecured creditors “unfortunate,” and said it stems from the debtors “continuing to take direction from remote parties in Singapore at the expense of structurally senior creditors.”

The unsecured creditors and BofA also said the debtors are continuing to pursue an “aggressive, costly and litigious” path in Chapter 11, despite litigation offering “little meaningful benefit” to unsecured creditors who are the debtors’ economic stakeholders.

“The creditors’ feared run-away train has become reality with administrative claims through Aug. 31 already exceeding $65 million with no end in sight, even though the debtors sold substantially all of their assets months ago and have no operations,” the group added.

The group said it has repeatedly asked the debtors to adopt “a more practical” approach aligned with the interests of creditors.

“Nothing is likely to change if exclusivity is extended again,” the group said. “It should not be.”

As previously reported, the company asked the court to extend the plan filing period through Oct. 25 and the solicitation period through Dec. 27.

“To preserve the debtors’ substantial progress in these Chapter 11 cases, including the sale process, and to allow for further progress to be made with respect to plan negotiations and the claims reconciliation process, the debtors seek an extension of the bankruptcy code’s exclusive periods for filing and soliciting a Chapter 11 plan by 70 days,” the company said in its motion.

A hearing is scheduled for Sept. 30.

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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