Holiday Inn Manhattan lenders have plan to pay unsecured creditors in full

By Sarah Lizee

Olympia, Wash., March 10 – Golden Seahorse LLC, which does business as Holiday Inn Manhattan Financial District, should have its exclusive periods to file and solicit votes on a Chapter 11 plan terminated, a group of secured lenders led by trustee Wilmington Trust, NA said in a motion filed Friday with the U.S. Bankruptcy Court for the Southern District of New York.

Wilmington said the secured lenders are proposing to file a plan that would pay unsecured creditors in full.

“Terminating exclusivity will promote a greater likelihood of sooner confirmation of a plan that pays unsecured creditors in full,” the trustee said in the motion.

“The alternative only promotes potential delay.”

The debtor had informed the group that it intends to file a plan reinstating a $137.03 million loan with the secured lenders while excluding the payment of default interest, claiming that this renders the claims of secured lenders unimpaired.

However, the secured lenders said default interest is required to be paid to them for their claims to actually be unimpaired.

Wilmington said that because this is a legal determination, if it is determined adverse to the debtor, the debtor’s plan will not be confirmable and the secured lenders’ plan would be delayed.

“To avoid this, terminating exclusivity is appropriate,” the trustee said.

Wilmington added that termination of exclusivity will only eliminate exclusivity for the 60 days for solicitation if the debtor files a plan within 120 days of the petition date.

Also, if the debtor files a plan proposing to pay the unsecured creditors in full, then it will not need the 60 days to solicit votes, as there will only be two unimpaired classes under debtor’s proposed plan in this instance, the trustee said.

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

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