On Aug 14, Eagle Hospitality Trust’s manager and trustee said they discovered an unauthorised loan application dated May 18, 2020 made under the United States Paycheck Protection Program (PPP) administered by the United States Small Business Administration on behalf of Urban Commons Queensway, which is the master lessor of Queen Mary Long Beach. The manager and trustee also discovered certain Master Lessees’ delinquency to pay outstanding taxes to the relevant tax authorities.
The statement released on SGXnet says that the professional advisers of the manager and trustee “have concluded and are of the view that the Queen Mary PPP Application that was submitted on behalf of the Queen Mary Master Lessor and the receipt of the funds under the Queen Mary PPP Loan were both unauthorised and improper, and they are looking to a rectification and unwinding of the unauthorised loan.”
In addition, certain outstanding sales taxes, lodger’s taxes and tourism improvement district taxes have not been paid and have continued to accrue over certain periods for Holiday Inn Denver East – Stapleton and Renaissance Denver Stapleton since at least December 2019 to the tax authorities of the City and County of Denver.
The Aug 14 announcement says the manager and trustee are consulting their professional advisers to ascertain the impact of the non-payment of the relevant Denver Outstanding Taxes by the 4 Denver Master Lessees to the tax authorities of the City and County of Denver and the appropriate course of action to be taken.
According to the announcement tourism development taxes have also not been paid in Orange County, Florida for Holiday Inn Resort Orlando Suites – Waterpark (HIRO) since February 2020.
Urban Commons has articulated that is has entered into a repayment agreement with Orange County, Florida to pay the taxes in three installments. The Comptroller of Orange County would release the HIRO account after the second installment which Urban Commons did not pay. Hence, the Comptroller refused to release the HIRO Account or delay enforcement of the garnishment referenced in the HIRO Tax Notice, the announcement says.
Elsewhere, the franchisors of 10 hotels (EHT owns 18 hotels including the Queen Mary) have issued notices of default and termination to Urban Commons, as a result of Urban Commons’ failure to cure its default for non-payment of fees and other amounts due and owing to the relevant franchisor. The termination notices take place on a range of dates mainly from Aug to end-Oct.
According to FTI Consulting, the outstanding amount due by Urban Commons to the franchisors amount to approximately US$3.8 million.
On June 5, the Monetary Authority of Singapore and the Commercial Affairs Department (CAD) of the Singapore Police Force have launched a joint investigation into current and former directors, and officers responsible for managing EHT in connection with suspected breaches of disclosure.
EHT was suspended on March 24 this year, at 13.7 cents. Its IPO price was 78 cents in May 2019.
