Tillary Hotel lender submits second amended disclosure statement

Chicago, April 28 – 85 Flatbush RHO Mezz LLC, the owner of the Tillary Hotel in Brooklyn, N.Y., is the subject of a second amended disclosure statement that competes with the one it submitted, according to court documents filed with the U.S. Bankruptcy Court for the Southern District of New York.

Prepetition lender TH Holdco LLC is advocating for a different plan.

TH’s plan and disclosure statement, which have not been approved, are premised on a sale of the property, permitting TH to credit bid, and to the extent TH is the successful purchaser, a commitment by TH to fund the sum of $200,000 for pro rata distribution to the debtors’ unsecured creditors.

TH asserts that the shortcomings of the debtors’ plan are that:

• TH will not receive any post-petition interest;

• Financing of $78 million is needed to fund the plan and there is not yet a financing commitment;

• The amended plan is subject to entry into a long-term agreement with the New York Department of Homeless Services which has not been filed of public record nor approved by the bankruptcy court; and

• The plan is contingent on new value equity contribution of at least $9,611,096.

The lender’s plan sets out 15 classes of claims with the highest amount going to TH Holdco Secured Claim, class 3, in the amount of $85,158,816, an impaired claim with voting rights.

The lender’s plan will be funded by the TH Holdco additional consideration, the sale proceeds (if any) which will be allocable to the hotel property and/or the residential property as set forth in the purchase agreement and the debtors’ available cash.

There is also an adversary proceeding started by 85 Flatbush Mezz LLC, the prepetition mezzanine lender, against TH Holdco. The company said the adversary proceeding needs to be fully adjudicated before the court can consider TH Holdco’s disclosure statement.

The owner of the boutique hotel in Brooklyn, N.Y., filed bankruptcy on Dec. 18, 2020 under Chapter 11 case number 20-23280.

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