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Williamsburg Hotel owner objects to U.S. trustee’s conversion motion
By Sarah Lizee
Olympia, Wash., Sept. 28 – 96 Wythe Acquisition LLC, the owner of the Williamsburg Hotel in Brooklyn, N.Y., objected Monday to Region 2 U.S. trustee William K. Harrington’s motion seeking conversion or dismissal of the company’s bankruptcy case, according to a filing with the U.S. Bankruptcy Court for the Southern District of New York.
As previously reported, the company has filed a Chapter 11 plan and related disclosure statement. A hearing on the disclosure statement is scheduled for Nov. 5. The company said the proposed confirmation date is Dec. 13.
“Notwithstanding the debtor’s current profitability and plan for emergence, the [U.S. trustee] curiously seeks to derail all of that by converting the Chapter 11 case to a forced liquidation under Chapter 7 or dismissing the Chapter 11 case,” the company said in its objection.
“Not only contrary to the interests of the debtor, its estate and creditors, there is absolutely no basis for such extraordinary relief under well-established law.”
The U.S. trustee had cited “gross mismanagement” as a cause for conversion or dismissal, but the company claims that the allegation is disproven by the fact that it is running a profitable business while formulating a plan to reorganize and emerge from Chapter 11 protection.
“In alleging mismanagement, the [U.S. trustee] relies on discreet, technical discrepancies that have no effect on the estate or Chapter 11 case, as well as a misunderstanding of the debtor’s cash management system – neither of which can support the extraordinary relief requested here,” the company said.
The Brooklyn, N.Y.-based hotel owner filed bankruptcy on Feb. 23, 2021 under Chapter 11 case number 21-22108.
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