Eagle Hospitality Chapter 11 plan draws objection from U.S. trustee

By Sarah Lizee

Olympia, Wash., Oct. 29 – Eagle Hospitality Real Estate Investment Trust unit EHT US1, Inc.’s Chapter 11 plan of liquidation drew an objection on Friday from Regions 3 and 9 U.S. trustee Andrew R. Vara, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

Vara said the proposed opt out mechanism does not sufficiently demonstrate creditors’ consent to the broad third-party non-debtor releases.

He also said that the exculpation provision in the plan is overly broad because it includes non-estate fiduciaries and is not limited to the proper temporal scope.

The U.S. trustee said the plan’s various claim treatment provisions are inadequate for solicitation because the treatment of allowed claims in certain classes are “convoluted, complex and confoundingly dense.”

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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