Holiday Inn Manhattan files Chapter 11 plan and disclosure statement

By Sarah Lizee

Olympia, Wash., March 28 – Golden Seahorse LLC, which does business as Holiday Inn Manhattan Financial District, filed a Chapter 11 plan and disclosure statement Tuesday with the U.S. Bankruptcy Court for the Southern District of New York.

The company intends to fund the plan from revenue generated from the Holiday Inn hotel’s operations and from a plan contribution of $5 million to $7 million.

All administrative claims and priority tax claims will be paid in full.

Wilmington Trust holds a first mortgage on the hotel property. Wilmington Trust has filed a claim against the debtor in the total amount of $179.48 million as of the petition date, which includes about $18 million in default interest and over $10 million in other charges stemming from the debtor’s payment default.

The debtor plans to obtain the funds needed to pay Wilmington Trust the balloon payment on the maturity date by refinancing the property or selling it.

On the effective date, Wilmington Trust will get either: reinstatement of the principal amount of its allowed claim, plus payment in full in cash of all accrued interest at the non-default rate under a promissory note and all reasonable fees and ancillary expenses required to be paid under the loan through the effective date; or, in the event the bankruptcy court determines the debtor is required to pay the default interest and other related charges in order to deaccelerate and reinstate the loan, the default interest will be added to the loan and the loan will be modified/recast and converted to a 10-year interest-only loan at a simple interest rate of 6½% with a balloon payment due on the maturity date.

The first interest payment under the modified loan will be made on the first day of the month following the effective date.

In the event the property is sold prior to the August 2033 maturity date, Wilmington’s claim will be paid in full from the sale proceeds.

The Small Business Administration holds a class 2 secured claim. Starting on July 1, 2024, the reorganized debtor will make monthly payments of $1,000 per month until the claim is paid in full. The claim will accrue interest at 3.75% per year.

In the event the total allowed unsecured claims are $1 million or less, holders will be paid in full without interest on the effective date. If they exceed $1 million, all holders will be paid their pro rata share of $1 million on the effective date and the balance of their claims will be paid in full without interest over a two-year period.

In the event the property is sold after the confirmation date, the unsecured claims will be paid any remaining unpaid amount of their distributions from the sale proceeds.

Hysendal USA LLC is the only interest holder and will retain its interest in exchange for the plan contribution. However, in the event the property is sold prior to the maturity date, Hysendal will receive any sale proceeds left over after the payment of all allowed claims.

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

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