Of the properties protected by Chapter 11, nine properties fetched US$326.5 million ($432.2 million) in accordance with the terms of the Stalking Horse Agreement. Five properties fetched US$115.4 million, which is US$24.8 million more than the floor price set by the Stalking Horse Agreement. The Stalking Horse is Madison Phoenix, an affiliate of Monarch Alternative Capital which also provided financing to some of the properties. Altogether the sale is likely to fetch US$481.9 million.
ARA US Hospitality Trust (ARA H-Trust) has so far survived the pandemic despite losing more than 15% of its portfolio value (see Table 2), as its investors forfeited distributions in FY2020 and possibly this year as well. On the other hand, the status of Eagle Hospitality Trust (EHT) as a listed stapled security comprising a REIT and a business trust is approaching its endgame. Its portfolio has been protected under Chapter 11 since January this year. Both ARA H-Trust and EHT listed within weeks of each other. ARA H-Trust, however, listed without the financial engineering that was a characteristic of EHT’s portfolio.
At any rate, according to the latest announcement by DBS Trustee, the US Bankruptcy Court at the sale hearing has approved the sale of EHT’s 14 Chapter 11 properties (see Table 1). DBS Trustee is overseeing the sale of EHT’s assets under Chapter 11 protection in accordance with local regulations, where it acts in the interests of the stapled security and its unitholders.
