Holiday Inn Manhattan secured lenders argue against ‘force majeure’

Chicago, Nov. 1 – Golden Seahorse LLC, which does business as Holiday Inn Manhattan Financial District, should not be able to shirk payment obligations due to force majeure, namely Covid, representatives for the secured lenders argued in a filing with the U.S. Bankruptcy Court for the Southern District of New York.

The inclusion or relief of the debtor due to Covid would be extraordinary, the secured lenders argue through their representative.

The representative argues that impossibility of performance and frustration of purpose are not payment defenses.

Further, the representative argues that impairment of the asset does not alter the borrower’s payment obligations.

Holiday Inn could have either insured against an event like Covid or it could have used capital contributions to make payments on the loans if it could not fully rely on proceeds generated by the hotel.

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

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