The profit and loss statement lists other income of US$14.3 million during 1H2020. Other income comprises recovery of legal and professional fees, caretaker expenses and interest expense due to default rates that are accrued in statement of comprehensive income. It appears that EHT’s manager and trustee are looking to recover some of the costs from the master lessees, owned by Urban Commons. “To the extent these expenses are incurred in connection with any default under the master lease agreements, they would fall within the scope of the relevant Master Lessees’ indemnity obligation under MLAs,” the results announcement says.
Eagle Hospitality Trust -which owns 18 hotels including the Queen Mary Long Beach, a ship - announced 2Q2020 and 1H2020 results on Aug 14. The costs have ballooned. Trust expenses were US$11.6 million, and caretaker expenses were US$3.36 million. Trust expenses consist of recurring expenses, legal fees and professional fees incurred in connection with the Restructuring and Strategic Review of EHT's business as well as the defaults under the master lease agreements (MLAs).
Caretaker expenses were incurred because of temporary caretaker arrangements at certain hotels in EHT's portfolio. These were caused by lack of remedial action on the part of the relevant Master Lessees - all subsidiaries of Urban Commons - to safeguard the hotels whose hotel management agreements have been, amongst other things, terminated.
