HTML Document View

Full title: Motion for 2004 Examination -- Motion of the Official Committee of Unsecured Creditors for an Order Pursuant to Bankruptcy Rule 2004 and Local Bankruptcy Rule 2004-1 Directing the Production of Documents by Urban Commons, LLC, the Master Lessees, EHT Asset Management, LLC, Taylor Woods, Howard Wu, and Others Filed by Official Committee of Unsecured Creditors. (Attachments: # 1 Exhibit A) (Keilson, Brya) (Entered: 07/14/2021)

Document posted on Jul 13, 2021 in the bankruptcy, 16 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

---- MOTION OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR AN ORDER PURSUANT TO BANKRUPTCY RULE 2004 AND LOCAL BANKRUPTCY RULE 2004-1 DIRECTING THE PRODUCTION OF DOCUMENTS BY URBAN COMMONS, LLC, THE MASTER LESSEES, EHT ASSET MANAGEMENT, LLC, TAYLOR WOODS, HOWARD WU, AND OTHERS The Official Committee of Unsecured Creditors (the “Committee”) of the debtors and debtors-in-possession (collectively, the “Debtors” or the “Company”) in the above-captioned chapter 11 cases (the “Chapter 11 Cases”) hereby files this motion (the “Motion”) and moves for entry of an order, pursuant to 11 U.S.C. §§ 105(a) and 1103(c); Rule 2004 of the Federal Rules of Bankruptcy Procedure (the “Rules”) and Rule 2004-1 of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the “Local 1 The Debtors in these chapter 11 cases, along with the last four digits of each debtor’s tax identification number, as applicable, are as follows: EHT US1, Inc. (6703); 5151 Wiley Post Way, Salt Lake City, LLC (1455); ASAP Cayman Atlanta Hotel LLC (2088); ASAP Cayman Denver Tech LLC (7531);ASAP Cayman Salt Lake City Hotel LLC (7546); ASAP Salt Lake City Hotel, LLC (7146); Atlanta Hotel Holdings, LLC (6450); CI Hospitality Investment, LLC (7641); Eagle Hospitality Real Estate Investment Trust (7734); Eagle Hospitality Trust S1 Pte.UCCONT1, LLC (0463); UCF 1, LLC (6406); UCRDH, LLC (2279); UCHIDH, LLC (6497); Urban Commons 4th Street A, LLC (1768); Urban Commons Anaheim HI, LLC (3292); Urban Commons Bayshore A, LLC (2422); Urban Commons Cordova A, LLC (4152); Urban Commons Danbury A, LLC (4388); Urban Commons Highway 111 A, LLC (4497); Urban Commons Queensway, LLC (6882); Urban Commons Riverside Blvd., A, LLC (4661); and USHIL Holdco Member, LLC (4796). Rules”) authorizing the Committee to issue document subpoenas compelling the production of documents by Urban Commons, LLC (“Urban Commons”)2, EHT HIDH, LLC, EHT ESAN, LLC, EHT RDH, LLC, EHT HISM, LLC, EHT HIOR, LLC, EHT SPH, LLC, EHT ESPD, LLC, EHT HIA, LLC, EHT FPSJ, LLC, EHT WSAC, LLC, EHT CPDCT, LLC, EHT QMLB, LLC, EHT HAN, LLC, EHT DHSLC, LLC, EHT SDTC, LLC, EHT CPDGA, LLC, EHT HHG, LLC, EHT RWH, LLC (collectively, the “Master Lessees”), EHT Asset Management, LLC, Taylor Woods (“Woods”), Howard Wu (“Wu”), and their current or former affiliated persons and entities (collectively, the “Investigation Targets”) and respectfully states as follows: PRELIMINARY STATEMENT However, on July 2, 2021, Potter Anderson filed a motion seeking leave to withdraw as counsel to Urban Commons, the Master Lessees, Woods, Wu and EHT Asset Management, LLC creating further uncertainty as to production of documents.

List of Tables

Document Contents

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ---------------------------------------------------------x- - --- : Chapter 11 In re: : : Case No. 21-10036 (CSS) EHT US1, Inc., et al.,1 : : (Jointly Administered) Debtors. : : Obj. Deadline: TBD : Hearing Date: TBD ---------------------------------------------------------x- ---- MOTION OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR AN ORDER PURSUANT TO BANKRUPTCY RULE 2004 AND LOCAL BANKRUPTCY RULE 2004-1 DIRECTING THE PRODUCTION OF DOCUMENTS BY URBAN COMMONS, LLC, THE MASTER LESSEES, EHT ASSET MANAGEMENT, LLC, TAYLOR WOODS, HOWARD WU, AND OTHERS The Official Committee of Unsecured Creditors (the “Committee”) of the debtors and debtors-in-possession (collectively, the “Debtors” or the “Company”) in the above-captioned chapter 11 cases (the “Chapter 11 Cases”) hereby files this motion (the “Motion”) and moves for entry of an order, pursuant to 11 U.S.C. §§ 105(a) and 1103(c); Rule 2004 of the Federal Rules of Bankruptcy Procedure (the “Rules”) and Rule 2004-1 of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the “Local 1 The Debtors in these chapter 11 cases, along with the last four digits of each debtor’s tax identification number, as applicable, are as follows: EHT US1, Inc. (6703); 5151 Wiley Post Way, Salt Lake City, LLC (1455); ASAP Cayman Atlanta Hotel LLC (2088); ASAP Cayman Denver Tech LLC (7531); ASAP Cayman Salt Lake City Hotel LLC (7546); ASAP Salt Lake City Hotel, LLC (7146); Atlanta Hotel Holdings, LLC (6450); CI Hospitality Investment, LLC (7641); Eagle Hospitality Real Estate Investment Trust (7734); Eagle Hospitality Trust S1 Pte. Ltd. (7669); Eagle Hospitality Trust S2 Pte. Ltd. (7657); EHT Cayman Corp. Ltd. (7656); Sky Harbor Atlanta Northeast, LLC (6450); Sky Harbor Denver Holdco, LLC (6650); Sky Harbor Denver Tech Center, LLC (8303); UCCONT1, LLC (0463); UCF 1, LLC (6406); UCRDH, LLC (2279); UCHIDH, LLC (6497); Urban Commons 4th Street A, LLC (1768); Urban Commons Anaheim HI, LLC (3292); Urban Commons Bayshore A, LLC (2422); Urban Commons Cordova A, LLC (4152); Urban Commons Danbury A, LLC (4388); Urban Commons Highway 111 A, LLC (4497); Urban Commons Queensway, LLC (6882); Urban Commons Riverside Blvd., A, LLC (4661); and USHIL Holdco Member, LLC (4796). The Debtors’ mailing address is 3 Times Square, 9th Floor New York, NY 10036 c/o Alan Tantleff (solely for purposes of notices and communications).

1

Rules”) authorizing the Committee to issue document subpoenas compelling the production of documents by Urban Commons, LLC (“Urban Commons”)2, EHT HIDH, LLC, EHT ESAN, LLC, EHT RDH, LLC, EHT HISM, LLC, EHT HIOR, LLC, EHT SPH, LLC, EHT ESPD, LLC, EHT HIA, LLC, EHT FPSJ, LLC, EHT WSAC, LLC, EHT CPDCT, LLC, EHT QMLB, LLC, EHT HAN, LLC, EHT DHSLC, LLC, EHT SDTC, LLC, EHT CPDGA, LLC, EHT HHG, LLC, EHT RWH, LLC (collectively, the “Master Lessees”), EHT Asset Management, LLC, Taylor Woods (“Woods”), Howard Wu (“Wu”), and their current or former affiliated persons and entities (collectively, the “Investigation Targets”) and respectfully states as follows: PRELIMINARY STATEMENT 1. This Motion will enable the Committee to fulfill its statutory duty under section 1103 of the Bankruptcy Code. As the Committee has previously highlighted for this court, the Committee is in the midst of investigating whether potential estate causes of action may exist against the Investigation Targets and the factual basis underlying categories of claims against the Debtors in order to facilitate plan negotiations. 2. There is no question that some of the Investigation Targets were insiders of the Debtors at some point in time, whether before or after the Eagle Hospitality Group’s initial public offering. In fact, until December 2020, the Debtor-parent entity was managed by the Former REIT Manager, that was in turn controlled by two Investigation Targets, Woods and Wu. Further, Woods and Wu controlled the equity interests in the sponsor of Eagle Hospitality Group’s initial 2 As discussed below, on April 29, 2021, an involuntary chapter 7 bankruptcy case was commenced against one of the master lessee related entities, specifically Urban Commons LLC. That Chapter 7 case is presently pending before the United States Bankruptcy Court for the Central District of California. On July 1, 2021, Carolyn A. Dye was appointed as the Chapter 7 trustee (the “UC Chapter 7 Trustee”) for Urban Commons. Counsel to the Committee is coordinating with the UC Chapter 7 Trustee on a consensual stipulation to modify the automatic stay (if and to the extent applicable). The Committee believes that much (if not all) of the information and documentation sought are business records of non-debtor entities and not subject to the automatic stay in the Urban Commons Chapter 7 case. Nonetheless, for the avoidance of doubt, this Motion seeks relief as to Urban Commons only to the extent any necessary relief is granted by the court presiding over the Urban Commons Chapter 7 proceeding.

2

public offering. In connection with the initial public offering, Woods and Wu caused the Debtors to enter into a number of Master Leases (as defined below) with the Master Lessees, which limited the Debtors from enjoying anything more than lease payments (some of which the Debtors have not received since before January 2020). The Master Lessees’ defaults under the Master Leases created a snowball effect – default under the Debtors’ primary credit facility, frozen cash accounts and closure of fifteen of eighteen of the Debtors’ hotels. 3. The discovery sought from the Investigation Targets allows the Committee to fill in the critical holes in its analysis of the Debtors’ prepetition transactions, including with its non-Debtor affiliates and those attributed with the Debtors’ declining financial position and bankruptcy filing. As the Committee works alongside the Debtors in formulating a chapter 11 plan, it is crucial for the Committee to investigate and identify any potential causes of action arising out of transactions involving the Investigation Targets that may ultimately create value and/or lead to return of valuable estate property and thereby increase recoveries for creditors. 4. The Committee also seeks information to analyze certain types of claims that may be disputed by the Debtors and have an effect on overall recoveries. For example, the Debtors annexed additional schedules to their Schedules of Assets and Liabilities listing certain “Hotel Claimants” whom the Debtors assert do not have claims against these estates because of an alleged lack of contractual privity with the Debtors; nor do the Debtors believe that any other proper basis for treatment as unsecured creditors in these cases exists. The conduct of the Debtors and related parties directly bears on the potential claims pool in these cases and overall recovery to unsecured creditors. The Committee seeks information to assess the various types of claims that are expected to be asserted by such Hotel Claimants and the veracity of defenses thereto.

3

5. Exploring the basis for the Debtors’ conduct with the Hotel Claimants better allows the Committee to advocate for a plan of reorganization that treats the Debtors’ unsecured creditors fairly. In addition to facilitating plan negotiations, the Committee hopes that obtaining these facts has the potential to resolve disputes and simplify a claims reconciliation process for many of these claims. The Committee initially sought this information informally from the Debtors, but the Debtors asserted that they did not possess large categories of responsive documents and directed the Committee to the Former REIT Manager3 and Investigation Targets whom they asserted would have possession, custody, or control of such documents. 6. With respect to the instant Motion, over one month ago, the Committee sent an informal document request to Potter Anderson & Corroon LLP (“Potter Anderson”), as counsel to all of the Investigation Targets. After two telephonic meet and confers and a number of email exchanges over the past several weeks, Potter Anderson, on behalf of its clients, agreed to produce responsive documents. However, as the parties were preparing to finalize agreement on search terms, Potter Anderson (i) asserted that the entry of an order for relief in the Urban Commons chapter 7 case created uncertainty about the application of the automatic stay to the production, and (ii) thereafter, filed a motion seeking leave to withdraw as counsel to the Investigation Targets (which withdrawal motion is pending). All work on a consensual discovery process paused even though most (if not all) of the communications and documents being sought should be the business records of non-debtors (in the context of the Urban Commons case). To avoid any further delay, the Committee reached out to the UC Chapter 7 Trustee who has agreed that the automatic stay in that case does not prevent production of documents by the Investigation Targets to the Committee. 3 The Former REIT Manager is subject to an insolvency proceeding in Singapore. The Committee is working with the Debtors to determine the best process to obtain information from the Former REIT Manager. As a result, this Motion does not seek relief with respect to the Former REIT Manager but the Committee reserves its right to seek relief in the future.

4

7. On July 12, 2021, counsel to the Committee and Potter Anderson held another meet and confer session during which Potter Anderson indicated a partial production of documents were forthcoming, potentially by July 14 or July 15. Nonetheless, after over one month of proceeding on a consensual basis, the Committee files this Motion at this time because it has still has not received any documents from the Investigation Targets and is concerned that absent an order authorizing production, further delays could occur, hindering the Committee’s investigation process. Although the parties continue to discuss production and the Committee does not foreclose the possibility of receiving at least some of the requested documents in the near term, the timing is uncertain. With the Investigation Targets’ counsel now seeking to withdraw, further uncertainty exists, especially as Committee has asked Potter Anderson to identify any substitution counsel for the Investigation Targets but no one has yet been identified. The Committee, thus, is constrained to file this Motion in an abundance of caution while hoping to resolve matters amicably with the Investigation Targets.4 As discussed below, cause exists under Rule 2004 to authorize the Committee to seek discovery from the Investigation Targets. BACKGROUND A. The Eagle Hospitality Group Corporate Structure 8. The “Eagle Hospitality Group”, consisting of Eagle Hospitality Real Estate Investment Trust (“EH-REIT”), a publicly held, Singapore-based real estate investment trust, and its indirect and direct subsidiaries was established in May 2019 in connection with an initial public 4 As noted, prior to filing this Motion, the Committee and counsel to the Investigation Targets had been engaged in certain discussions on a consensual production, including prioritizing and refining certain of the requests. The proposed order (including Appendix 1) annexed to this Motion does not include the modifications previously discussed due, in part, to the uncertainty of continued cooperation by the Investigation Targets. However, the Committee is amenable to filing a revised proposed form of order in advance of the hearing on this Motion, to the extent the Committee and Investigation Targets come to an agreement as to a consensual form of order including the document request.

5

offering (the “IPO”). See Declaration of Alan Tantleff, Chief Restructuring Officer of Eagle Hospitality Group, in Support of Debtors’ Chapter 11 Petitions and First Day Motions (“FDA”) ⁋⁋ 7-8 [Docket No. 13]. The IPO was sponsored by Urban Commons, an entity whose equity interests are controlled by Woods and Wu. Id. ⁋ 12. 9. “EH-REIT is part of a stapled trust5, Eagle Hospitality Trust (“EHT”), consisting of EH-REIT and Eagle Hospitality Business Trust (“EH-BT”).6” Id. ⁋ 8. Prior to December 2020, EH-REIT was managed by the Former REIT Manager, which is also controlled by Woods and Wu. Id. ⁋ 11. 10. The Eagle Hospitality Group owns a portfolio of eighteen (18) hotels (the “Hotels”) in the United States. Id. ⁋ 9. Each hotel is owned by a separate LLC entity that is a member of the Eagle Hospitality Group (each, a “Propco”).7 Id. ⁋ 9. In turn, until shortly before filing for bankruptcy8, Eagle Hospitality Group’s hotel portfolio was leased pursuant to master lease agreements (the “Master Leases”) to the Master Lessees, eighteen subsidiaries of EHT Asset Management, LLC, which in turn is owned by Urban Commons. Id. ⁋ 12. While the Master Leases were in effect, the Master Lessees managed the day-to-day operations of the Hotels and the Master Lessees would pay rent to the Propcos, which is ultimately the only income earned by the Propcos. Id. Meanwhile, the Woods & Wu owned Master Lessees had the authority to retain the remaining profits from the Hotels. Id. 11. In addition to the Master Leases, the Master Lessees also entered into a number of “hotel management agreements” with third-party hotel management companies (the “Hotel 5 EH-REIT is a trust and acts at the direction of a trustee, DBS Trustee Limited. 6 EH-BT is owned by third parties and is not a subsidiary of EH-REIT. As of the bankruptcy filing, EH-BT has been dormant. 7 Each of the Propcos are owned through direct and indirect intermediary entities between EH-REIT and the Propcos. 8 Fifteen of the eighteen Propcos are Debtors in these Chapter 11 Cases.

6

Managers”) to manage the properties owned by the Eagle Hospitality Group and franchise agreements with a number of franchisors (the “Franchisors”) to brand the properties. Id. ⁋ 13. Certain of the Propcos, the Hotel Managers and Franchisors also entered into ancillary agreements in connection with “the ownership of certain of the Hotels and the Master Lessees’ execution of hotel management agreements and Franchise Agreements.” Id. ⁋ 31. Notably, “[p]rior to April 2020, Woods and Wu were authorized signatories for both the Propcos and Master Lessees, and, in many instances, were the signatories on both sides of key agreements which Woods and/or Wu literally signed twice: first for the Propco, second for the Master Lessee.” Id. ⁋ 55. B. The Master Lease Default 12. Beginning with the January 2020 rental obligations, the Master Lessees failed to pay rent to the Eagle Hospitality Group and continued to default on rental obligations thereafter. Id. ⁋ 14. Moreover, even before this, the Master Lessees began to default on payment obligations under various hotel management agreements, amounting to $52.9 million of debt owed to vendors, contractors, taxing authorities and others, which ultimately resulted in the closure of all but three of the hotels managed by the Hotel Managers. Id. ⁋ 14. 13. In March 2020, the defaults under the Master Leases led to the assertion of defaults and ultimately the acceleration of the Eagle Hospitality Group’s $341 million credit facility. Id. ⁋ 15. These defaults led to further financial constraints for the Debtors, including cash accounts being frozen, making such accounts accessible only through a number of forbearance agreements between the Eagle Hospitality Group and its prepetition lenders. Id. 14. “On September 21, 2020, the Eagle Hospitality Group served notices of termination with respect to each of the Master Leases upon the Master Lessees, which resulted in the automatic termination of the Master Leases pursuant to their terms ten days later, on October 1, 2020.” Id. ⁋

7

18. There are a number of actions pending in state court with respect to unlawful detainer actions taken by the Master Lessees following the termination of the Master Leases. Id. C. The Debtors Bankruptcy Filing 15. On January 18, 2021, each of the Debtors, with the exception of EH-REIT, filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. On January 27, 2021, EH-REIT filed a petition for voluntary relief under chapter 11 of the Bankruptcy Code. The Debtors continue in possession of their property and are operating and managing their businesses as debtors in possession pursuant to the provisions of 11 U.S.C. §§ 1107(a) and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed in these chapter 11 cases. 16. On February 4, 2021, the Office of the United States Trustee appointed the Committee pursuant to section 1102 of the Bankruptcy Code. See Docket Nos. 215 & 243. 17. On March 19, 2021, the Debtors filed its schedules of assets and liabilities as required of every chapter 11 debtor. See Docket Nos. 430-458. However, in addition to filing schedules substantially in the form of Official Forms prescribed by the Bankruptcy Rules, Rule 1007, the Debtors chose to annex certain schedules listing certain “Hotel Claimants” whom the Debtors assert do not have contractual privity with the Debtors and whose claim is disputed by the Debtors. D. The Urban Commons Bankruptcy Filing 18. On April 29, 2021, Selbert Perkins Design, Inc., Epic Entertainment Group LLC and InterCommunications Inc. filed an involuntary bankruptcy petition against Urban Commons (the “UC Involuntary Petition”) for chapter 7 relief in the United States Bankruptcy Court for the Central District of California. See Case No. 2:21-bk-13523-ER, Docket No. 1.

8

19. Urban Commons failed to respond to the UC Involuntary Petition. On June 24, 2021, the United States Bankruptcy Court for the Central District of California entered an order for relief. See Case No. 2:21-bk-13523-ER, Docket No. 27. 20. On June 28, 2021, Urban Commons filed a motion requesting the United States Bankruptcy Court for the Central District of California set aside the order for relief. See Case No. 2:21-bk-13523-ER, Docket No. 29. The motion remains pending before the court. 21. The Committee has communicated with the UC Chapter 7 Trustee, who has agreed that the automatic stay does not prevent the discovery the Committee seeks. The parties are now negotiating a stipulation to formally modify the stay (if and to the extent applicable) to allow the discovery to proceed. E. The Debtors’ 2004 Motion and the Committee’s Document Requests 22. On January 29, 2021, the Debtors filed a motion pursuant to Rule 2004 (the “Debtors’ 2004 Motion”) seeking authorization to conduct an examination of Woods, Wu, Urban Commons and current or affiliated persons and entities (the “Debtors’ Investigation Targets”). See Docket No. 122. On March 16, 2021, this Court entered an order approving the Debtors’ 2004 Motion and authorizing the examination of the Debtors’ Investigation Targets. See Docket No. 376. 23. On April 27, 2021, the Committee served an informal document request upon the Debtors seeking certain documents in connection with the Committee’s investigation of related-party transactions between the Debtors and their pre-IPO and post-IPO non-debtor affiliates and sponsors, all intercompany transactions between the Debtors and their affiliates, and the Debtors’ conduct with respect to third-party transactions to evaluate the viability of any potential claims arising out of any such transactions or dealings. On May 19, 2021 and May 21, 2021, the Debtors

9

produced a number of responsive documents, including documents received from the Debtors’ Investigation Targets in connection with the Debtors’ 2004 Motion. However, the Debtors acknowledged there were a significant number of documents responsive to the Committee’s request that were not in the Debtors’ possession but may be in the possession of the Investigation Targets or the Former REIT Manager. Accordingly, the Committee determined it could not conduct a fulsome investigation unless it was able to obtain these documents from the Investigation Targets. 24. On June 8, 2021, the Committee submitted an informal document request to counsel to Urban Commons, the Master Lessees, Woods, Wu and EHT Asset Management, Inc. and suggested several dates to “meet and confer” regarding the Committee’s request. Counsel to the Committee and Potter Anderson (counsel to all of the Investigation Targets), held its initial meet and confer sessions on June 15, 2021 and June 16, 2021. 25. On June 21, 2021, Potter Anderson sent an email to counsel to the Committee indicating counsel had “received general authority to proceed with producing items that [they] have in [their] possession informally, subject to all rights, privileges, defenses, etc. as would be typical in a discovery scenario.” Potter Anderson indicated it was working on obtaining the responsive documents and would produce documents on a rolling basis. In reliance upon this, and the expectation that documentation would be produced promptly, the Committee held off seeking formal discovery authorized by this court. However, on July 2, 2021, Potter Anderson filed a motion seeking leave to withdraw as counsel to Urban Commons, the Master Lessees, Woods, Wu and EHT Asset Management, LLC creating further uncertainty as to production of documents. See Docket No. 910.

10

26. The Former REIT Manager may have documents relevant to the Committee’s Investigation, but the Committee is not seeking documents from the Former REIT Manager through this Motion, as the Committee understands that the Former REIT Manager has recently become the subject of a liquidation proceeding in Singapore. As part of its informal document requests in May and June, the Committee asked the Debtors and the Investigation Targets whether they are in possession of the Former REIT Manager’s emails and other documents. The Investigation Targets have not responded, so it is unclear whether document productions by the Investigation targets will produce relevant documents of the Former REIT Manager. While the Debtors have requested documents from the Former REIT Manager and are willing to share those documents with the Committee in response to the Committee’s document requests of the Debtors, to date the Former REIT Manager has not turned over documents to the Debtors. The Committee has been in discussions with the Debtors about options for seeking documents from the Former REIT Manager and will continue to cooperate with the Debtors. Pending the outcome of such efforts, the Committee reserves all rights to seek further relief with respect to the Former REIT Manager. 27. The Committee is aware certain of the documents it has requested have been alleged to have been saved on a common server with Urban Commons prior to Urban Commons’ involuntary bankruptcy filing. Nonetheless, as discussed previously, this should not be an impediment to production, especially as relates to non-debtor documentation. 28. On July 12, 2021, counsel to the Committee and Potter Anderson held another meet and confer session, during which Potter Anderson indicated it had obtained over 1,000 documents from Urban Commons and is currently reviewing the documents in preparation for production as early as July 14. However, as of the filing of this Motion, the Committee has not received any

11

documents in response to its document request, although the Committee and the Investigation Targets continue to engage in discussions that may lead to the production of documents on a consensual basis. Yet, there is now uncertainty over whether the Investigation Targets will continue to be represented by counsel in this matter and whether the Committee will obtain a full production prior to Potter Anderson’s withdrawal. In this context, the Committee can no longer rely solely on the consensual discovery process which, if unsuccessful, could cause its investigation to be delayed significantly and result in additional cost to the estates. In an exercise of caution, the Committee is constrained to seek an order under Rule 2004 at this time. JURISDICTION 29. The Court has subject matter jurisdiction to consider this matter pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409. RELIEF REQUESTED 30. Pursuant to Rule 2004, the Committee seeks entry of an order, in the same form or substantially the same form attached hereto as Exhibit A, authorizing it to issue subpoenas compelling the production of documents substantially in the form set forth in the document request attached as Appendix 1. This authority shall not waive the right of any entity or person to object to, or move to quash, any such requests. This authority is also subject to any court approval deemed necessary in connection with Urban Commons’ bankruptcy filing. 31. Additionally, the Committee respectfully requests that the Court authorize service of the document subpoenas by email upon counsel for any parties that have appeared in these cases.

12

BASIS FOR RELIEF REQUESTED A. The Committee is Obligated to Investigate Potential Estate Causes of Action 32. The Committee acts as an independent estate fiduciary for all unsecured creditors. The Committee bears a statutory duty to conduct an investigation of “the acts, conduct, assets, liabilities, and financial condition of the debtor . . . and any other matter relevant to the case or to the formulation of a plan.” 11 U.S.C. § 1103(c)(2). 33. It is indisputable that some of the Investigation Targets were insiders both before and after the IPO and were involved in the vast majority of the Debtors’ intercompany and third party transactions, in some instances as authorized signatories on both sides of the transaction. The Committee’s investigation of the Investigation Targets and their involvement in a number of intercompany transactions could identify valuable estate causes of action. Accordingly, in order to fulfill its fiduciary duty to maximize the value of the Debtor’s estate, the Committee is obligated to investigate the potential claims relating to the Investigation Targets and to recover valuable estate property. B. The Discovery Sought Falls Within the Broad Scope of Rule 2004 34. Rule 2004 permits discovery of “acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor's estate” Fed. R. Bankr. P. 2004(b). Rule 2004 works in parallel with the Committee’s duty to investigate under section 1103 of the Bankruptcy Code. Accordingly, “[o]n motion of any party in interest, the court may order” the production of documents. Fed. R. Bankr. P. 2004(a). 35. The discovery sought by the Committee falls well within the “broad [and] unfettered” scope of Rule 2004. In re Countrywide Home Loans, Inc., 384 B.R. 373, 400 (Bankr. W.D. Pa. 2008) (noting Rule 2004 examinations are broad, unfettered and in the nature of fishing

13

expeditions). In fact, the scope of a Rule 2004 examination is broader than discovery permitted under the Federal Rules of Civil Procedure. In re Valley Forge Plaza Assocs., 109 B.R. 669, 674 (Bankr. E.D. Pa. 1990); In re Ecam Publications, Inc., 131 B.R. 556, 559 (Bankr. S.D.N.Y. 1991) (same); In re Drexel Burnham Lambert Group, Inc., 123 B.R. 702, 711 (Bankr. S.D.N.Y. 1991) (same). Moreover, discovery under Rule 2004 can be used as a “pre-litigation discovery device” unlike the Federal Rules of Civil Procedure. In re Wilson, 413 B.R. 330, 336 (Bankr. E.D. La. 2009). 36. As the Committee is continuing to conduct diligence and work with the Debtors on the construct of a plan that will maximize recovery to unsecured creditors, the Committee requires discovery from the Investigation Targets. The Committee also needs this discovery to analyze the potential types of claims that may be asserted by the Hotel Claimants and the veracity of and defenses thereto. Here, given the complexity and number of prepetition transactions, among insiders of the Debtors, the requested discovery is well within the bounds of Rule 2004 and the Court’s discretion to permit such discovery. CERTIFICATION PURSUANT TO LOCAL RULE 2004-1 37. In accordance with Local Rule 2004-1, the Committee certifies that, on June 8, 2021, counsel to the Committee emailed known counsel to the Master Lessees, Woods, Wu and EHT Asset Management, LLC, attaching the discovery request (substantially identical to the document request attached as Appendix 1) and offering to meet and confer telephonically concerning the scope of the production. On June 15, 2021 and June 16, 2021, counsel to the Committee and Potter Anderson (counsel to Urban Commons, the Master Lessees, Woods, Wu and EHT Asset Management, LLC) held meet and confer sessions. Following a number of email exchanges between counsel to the Committee and Potter Anderson indicated a production of

14

documents was forthcoming. However, Potter Anderson then sought to withdraw as counsel the following week, thereby creating uncertainty around the future production process. 38. The parties held a meet and confer session most recently, on July 12, 2021, during which, Potter Anderson indicated a partial production was forthcoming. The parties continue to work consensually, however, as of the date of this Motion, the Committee has not received any documents from the Investigation Targets. 39. As discussed in paragraph 23, upon information and belief, the Committee’s document requests pursuant to this motion are distinct from the documents the Debtor’s received from certain of the Investigation Targets in response to the Debtors’ 2004 Order. For the foregoing reasons, undersigned counsel for the Committee certifies that the Committee has fully complied with Local Rule 2004-1. NOTICE 40. The Committee will provide notice of this Motion to: (a) Urban Commons (including the UC Chapter 7 Trustee), the Master Lessees, Taylor Woods, Howard Wu, and EHT Asset Management, LLC and their known counsel; (b) counsel to the Debtors; (c) the Office of the United States Trustee for the District of Delaware; (d) counsel to the Debtors’ secured lenders; (e) the United States Attorney’s Office for the District of Delaware; and (f) any other parties entitled to notice pursuant to Local Rule 2004-1. The Committee submits that, in light of the nature of the relief requested, no other or further notice need be given. NO PRIOR REQUEST 41. No prior request has been made for the relief sought in this Motion.

15

CONCLUSION WHEREFORE, the Committee respectfully requests that the Court: (i) enter an order granting the relief sought herein in the same form or substantially the same form attached hereto as Exhibit A; and (ii) grant such other and further relief as the Court deems just and proper. Dated: July 14, 2021 MORRIS JAMES LLP /s/ Brya M. Keilson_______________ Eric J. Monzo (DE Bar No. 5214) Brya M. Keilson (DE Bar No. 4643) 500 Delaware Avenue, Suite 1500 Wilmington, DE 19801 Telephone: (302) 888-6800 Facsimile: (302) 571-1750 E-mail: emonzo@morrisjames.com E-mail: bkeilson@morrisjames.com and KRAMER LEVIN NAFTALIS & FRANKEL LLP Adam C. Rogoff (admitted pro hac vice) Robert T. Schmidt (admitted pro hac vice) P. Bradley O’Neill (admitted pro hac vice) Douglas Buckley (admitted pro hac vice) 1177 Avenue of the Americas New York, New York 10036 Telephone: (212) 715-9100 Facsimile: (212) 715-8000 arogoff@kramerlevin.com rschmidt@kramerlevin.com boneill@kramerlevin.com dbuckley@kramerlevin.com Counsel to the Official Committee of Unsecured Creditors

16