Tillary Hotel objects to competing amended disclosure statement

Chicago, May 9 – 85 Flatbush RHO Mezz LLC, the owner of the Tillary Hotel in Brooklyn, N.Y., objected to its prepetition lender’s competing plan, according to a filing with the U.S. Bankruptcy Court for the Southern District of New York.

The competing plan, based on the second amended disclosure statement, allows for lender TH Holdco LLC to credit bid for the property with an opening bid of $90 million. The lender would also fund payments on account of certain administrative claims, including professional fees and U.S. trustee fees, from $1.25 million for an initial pro rata distribution to the debtors’ unsecured creditors. TH Holdco would additionally fund a second distribution to unsecured creditors, to the extend their claims are not paid from post-confirmation operations, approximately one year after the closing of the sale transaction.

The main objection is that the competing plan lacks adequate information.

The competing plan lacks a timeline, fails to disclose why TH asserts that the treatment of their class 3 secured claim applies to the Mezz debtor when TH did not advance any funds to the Mezz debtor, fails to disclose if TH intends to confirm the Mezz component in 85 Flatbush’s plan, fails to disclose how TH holds any unsecured deficiency claim against the debtors if TH is taking title to the property subject to its mortgage and fails to demonstrate the resources and ability to meet plan funding obligations.

85 Flatbush’s plan would be funded by exit financing and is premised upon an anticipated long-term lease with the New York City Department of Homeless Services.

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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