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Full title: Motion to Approve Compromise under Rule 9019 (Debtors' Motion, Pursuant to Bankruptcy Rule 9019, for Order Approving Stipulation Between Debtors and Scott's Sacramento Inc.) Filed by EHT US1, Inc.. Hearing scheduled for 8/12/2021 at 11:00 AM at US Bankruptcy Court, 824 Market St., 5th Fl., Courtroom #6, Wilmington, Delaware. Objections due by 8/4/2021. (Attachments: # 1 Notice of Motion # 2 Exhibit A - Proposed Order) (Dean, G.) (Entered: 07/21/2021)

Document posted on Jul 20, 2021 in the bankruptcy, 8 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

EHT US1, Inc. (“EHT”) and its affiliated debtors and debtors in possession (the “Debtors”) submit this motion (the “Motion”) pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) for entry of an order, substantially in the form attached as Exhibit A hereto (the “Proposed Order”), approving the stipulation (the “Stipulation”) between the Debtors and Scott’sThe 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 (9915); 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). Those discussions culminated in the Stipulation, the key terms of which are:  The Debtors agree that (i) prior to the Closing the Debtors took no steps to terminate the Lease, (ii) the Debtors shall take no position on the merits of the Clarification Motion, including the status of the Lease and Scott’s rights to possession and/or quiet enjoyment following the Closing, and (iii) the Debtors will not move to reject the Lease during the pendency of the Initial Standstill Period and, further, that any motion to reject the Lease will expressly state that such motion is without prejudice to the issues to be decided in connection with the Clarification Motion. Scott’s will release the Debtors from any obligations and claims (as defined in section 101(5) of the Bankruptcy Code) that Scott’s has, or may have, as against the Debtors, arising from or attributable to the period after the Closing and relating to (i) the Lease, (ii) the Leased Premises, (iii) the WS Hotel, and/or (iv) the Bankruptcy Code (the “Released Claims”).

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re Chapter 11 EHT US1, Inc. et al., Case No. 21-10036 (CSS) Debtors.1 (Jointly Administered) Objection Deadline: August 4, 2021 at 4:00 p.m. (ET) Hearing Date: August 12, 2021 at 11:00 a.m. (ET) DEBTORS’ MOTION, PURSUANT TO BANKRUPTCY RULE 9019, FOR ORDER APPROVING STIPULATION BETWEEN DEBTORS AND SCOTT’S SACRAMENTO INC. EHT US1, Inc. (“EHT”) and its affiliated debtors and debtors in possession (the “Debtors”) submit this motion (the “Motion”) pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) for entry of an order, substantially in the form attached as Exhibit A hereto (the “Proposed Order”), approving the stipulation (the “Stipulation”) between the Debtors and Scott’s Sacramento Inc. (“Scott’s”). A copy of the Stipulation is attached as Exhibit 1 to the Proposed Order, and is incorporated by reference as if fully set forth herein. In support of the Motion, the Debtors respectfully state as follows: JURISDICTION, VENUE, AND STATUTORY BASES 1. This Court has jurisdiction to consider this Motion pursuant to 28 U.S.C. §§ 157 and 1334, and the Amended Standing Order of Reference from the United States District Court for 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 (6846); 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 (9915); 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).

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the District of Delaware dated February 29, 2012. This is a core proceeding under 28 U.S.C. § 157(b)(2) and, pursuant to Rule 9013-1(f) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the “Local Rules”), the Debtors consent to entry of a final order by the Court in connection with the Motion to the extent it is later determined that the Court, absent consent of the parties, cannot enter final orders or judgments consistent with Article III of the United States Constitution. 2. Venue is proper before this Court under 28 U.S.C. §§ 1408 and 1409. The statutory bases for the relief requested herein are section 105(a) of Title 11 of the United States Code (the “Bankruptcy Code”) and Bankruptcy Rule 9019. RELEVANT BACKGROUND 3. On January 18, 2021, the Debtors (other than EH-REIT) commenced these chapter 11 cases by filing petitions for relief under chapter 11 of the Bankruptcy Code. Debtor Eagle Hospitality Real Estate Investment Trust commenced its chapter 11 case on January 27, 2021. The Debtors are managing and operating their businesses as debtors in possession pursuant to Bankruptcy Code sections 1107(a) and 1108. These chapter 11 cases are being jointly administered for procedural purposes only pursuant to Bankruptcy Rule 1015(b). 4. On February 4, 2021, the United States Trustee for Region 3 appointed the Official Committee of Unsecured Creditors of EHT US1, Inc. et al. (the “Committee”) to serve in these chapter 11 cases. By notice dated February 18, 2021 the U.S. Trustee amended the membership of the Committee.2 5. On March 9, 2021, the Debtors filed the Motion of Debtors for Entry of Orders (I) Approving (A) Bidding Procedures, (B) Designation of Stalking Horse Bidder and Stalking 2 See Docket No. 243.

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Horse Bidder Protections, (C) Form and Manner of Notice of Sale, Auctions, and Sale Hearing, and (D) Assumption and Assignment Procedures, (II) Scheduling Auctions and Sale Hearing, (III) Approving (A) Sale of Substantially All of Debtors’ Assets Free and Clear of Liens, Claims, Interests, and Encumbrances, and (B) Assumption and Assignment of Executory Contracts and Unexpired Leases, and (IV) Granting Related Relief [Docket No. 334] (the “Sale Motion”). On March 25, 2021, the Court entered an amended order granting the relief sought in the Sale Motion with respect to approval of the proposed bidding procedures and related relief, including, among other things, approval of the proposed stalking horse bid for substantially all of the Debtors’ assets [Docket No. 503] (the “Bidding Procedures Order”). 6. On May 28, 2021, the Bankruptcy Court entered the Order (I) Approving Asset Purchase Agreement, (II) Authorizing Sale of Assets Free and Clear of Liens, Claims, Encumbrances, and Other Interests, (III) Authorizing Assumption and Assignment of Executory Contracts and Unexpired Leases in Connection Therewith, and (V) Granting Related Relief[Docket No. 797] (the “Sale Order”), approving the sale of the MP Successful Bid Assets (as defined in the Sale Order) to Madison Phoenix LP, an affiliate of Monarch Alternative Capital LP and the Debtors’ DIP Lender (the “Buyer”) pursuant to the terms of the Asset Purchase Agreement attached as Exhibit A to the Sale Order (the “APA”). 7. One of the MP Successful Bid Assets is the WS Hotel (as defined in the Stipulation), otherwise known as the “Westin Sacramento.” On June 23, 2021, Scott’s filed the Scott’s Sacramento Inc.’s Motion for Clarification Related to Sale Order [Docket No. 797][Docket No 883] (the “Clarification Motion”). As alleged and set forth in the Clarification Motion, pursuant to a September 10, 2002 lease (as amended, the “Lease”), Scott’s operates a restaurant at the WS Hotel, as well as providing catering and room service at the WS Hotel.

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8. The Clarification Motion asserts that, notwithstanding the Sale Order, the sale of the WS Hotel to the Buyer was not free and clear of Scott’s possessory interest under the Lease. Specifically, the Clarification Motion asserts (among other things) that (i) under California law, the Lease grants Scott’s a “covenant of quiet enjoyment [that] runs with the land”3 and (ii) section “363(f) does not override tenant protections contained in [section] 365(h).”49. On June 27, 2021, Scott’s and the Buyer entered into the Stipulation to Continue Hearing on Scott’s Sacramento Inc.’s Motion for Clarification Related to Sale Order and to Agree to Standstill [Docket No. 887] (the “Standstill Agreement”), pursuant to which Scott’s and the Buyer agreed to (among other things) continue the hearing on the Clarification Motion until the Debtors’ omnibus hearing date to be set for August (the “Initial Standstill Period”) or such other date as the parties may agree, in order to explore the potential for a commercial resolution of the issues raised in the Clarification Motion.5 THE STIPULATION 10. Subsequent to the filing of the Clarification Motion, the Debtors and Scott’s have engaged in discussions regarding the legal and factual issues raised in the Clarification Motion. Those discussions culminated in the Stipulation, the key terms of which are:  The Debtors agree that (i) prior to the Closing the Debtors took no steps to terminate the Lease, (ii) the Debtors shall take no position on the merits of the Clarification Motion, including the status of the Lease and Scott’s rights to possession and/or quiet enjoyment following the Closing, and (iii) the Debtors will not move to reject the Lease during the pendency of the Initial Standstill Period and, further, that any motion to reject the Lease will expressly state that such motion is without prejudice to the issues to be decided in connection with the Clarification Motion. 3 Clarification Mot. ¶ 47. 4 Clarification Mot. ¶ 48. 5 The Standstill Agreement also provided that Scott’s would pay rent to the Buyer, and the Buyer would act as the Landlord under the Lease. See Standstill Agreement ¶ 8. While the Debtors were not a party to the Standstill Agreement, this arrangement is acceptable to the Debtors, who, in connection with the Stipulation, have agreed not to assert any post-Closing monetary claims against Scott’s and consent to all payments that come due under the Lease post-closing being made to the Buyer.

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 Scott’s agrees that it will not object to any motion to reject the Lease.  Scott’s will release the Debtors from any obligations and claims (as defined in section 101(5) of the Bankruptcy Code) that Scott’s has, or may have, as against the Debtors, arising from or attributable to the period after the Closing and relating to (i) the Lease, (ii) the Leased Premises, (iii) the WS Hotel, and/or (iv) the Bankruptcy Code (the “Released Claims”). The Released Claims specifically include, without limitation, any claims related to the rejection of the Lease by the Debtors. RELIEF REQUESTED 11. The Debtors request entry of an order, substantially in the form of the Proposed Order attached as Exhibit A hereto, authorizing the Debtors to enter into and perform under the Stipulation. BASIS FOR RELIEF 12. Settlements in bankruptcy are favored as a means of minimizing litigation, expediting the administration of the bankruptcy estates, and providing for the efficient resolution of bankruptcy cases. See Myers v. Martin (In re Martin), 91 F.3d 389, 393 (3rd Cir. 1996). To achieve these results, Bankruptcy Rule 9019(a) empowers a court to approve a settlement or compromise after notice and a hearing. 13. The Third Circuit Court of Appeals has provided the following four criteria that a court must consider to approve a settlement: (1) the probability of success in litigation; (2) the likely difficulties in collection; (3) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it; and (4) the paramount interest of the creditors. See Martin, 91 F.3d at 393; see also In re Managed Storage Int’l, Inc., 601 B.R. 261, 265 (Bankr. D. Del. 2019) (same). 14. When applying the above criteria to the facts of a particular case, a court “is not called upon to decide the merits of the underlying litigation nor determine whether the settlement was the best possible compromise.” Managed Storage, 601 B.R. at 265. Nor does a court have to

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conduct an evidentiary hearing as a prerequisite to approving a settlement. See Depoister v. Mary M. Holloway Found., 36 F.3d 582, 586 (7th Cir. 1994). Instead, “the Court must canvass the issues to see whether the settlement could meet the lowest point of reasonableness.” Managed Storage, 601 B.R. at 265 (internal references omitted). Finally, while the court “may not substitute the [Debtors]’ judgment for its own . . . a court may, nonetheless, take into account the [Debtors]’ business judgment in recommending a settlement. . . .” NovaPro Holdings, LLC v. U.S. Risk Ins. Grp., Inc. (In re NovaPro Holdings, LLC), No. 14-10895 (LSS), 2018 WL 2102323, at *4 (Bankr. D. Del. May 4, 2018). 15. In the present matter, the proposed settlement effectuated by the Stipulation falls well above the lowest point in the range of reasonableness and should be approved. 16. The Stipulation affords the Debtors significant benefits. Most obviously, the Debtors have obtained a release from Scott’s of all potential claims from the Closing and on, including any rejection damages claims—the best possible outcome for the Debtors and their estates. As such, the Stipulation satisfies the first and fourth Martin factors. The Stipulation also enables the Debtors to avoid becoming embroiled in potentially complex and factually intensive litigation, in satisfaction of the third Martin factor. I. Buyer’s Opposition to Stipulation 17. The Debtors understand that the Buyer opposes the Debtors’ entry into the Stipulation. While the Debtors will let the Buyer explain its position in any objection to the Motion it may file, the Debtors understand that the Buyer’s opposition is based on its belief that (i) the Lease has been terminated and (ii) the APA requires the Debtors to terminate, or otherwise support the Buyer’s termination of, the Lease. Neither of these support denial of the Motion. From the perspective of the Debtors and their estates, the Stipulation achieves the same result as

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termination—avoidance of any rejection damages claims asserted by Scott’s—without litigation with Scott’s. Nor is there any covenant or other provision in the APA that obligates the Debtors to take any action to terminate, or support the Buyer’s termination of, the Lease. CONCLUSION 18. For these reasons, the Debtors believe that entering into the Stipulation is a sound exercise of the Debtors’ business judgment under the circumstances and that the Stipulation is in the best interests of the Debtors and their estates. The Debtors, therefore, respectfully request that the Court approve the Stipulation and authorize the Debtors to perform thereunder. NOTICE 19. Notice of the Motion will be given to: (i) the U.S. Trustee; (ii) counsel to the Committee; (iii) counsel to the Buyer; (iv) counsel to Scott’s; and (v) all parties entitled to notice under Local Rule 2002-1(b). The Debtors submit that, under the circumstances, no other or further notice is required. [Remainder of page left intentionally blank.]

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WHEREFORE, the Debtors request the Court grant the Motion and such other and further relief as is just and proper. Dated: July 21, 2021 COLE SCHOTZ P.C. Wilmington, Delaware /s/ G. David Dean Seth Van Aalten (admitted pro hac vice) G. David Dean (No. 6403) Justin R. Alberto (No. 5126) 500 Delaware Avenue, Suite 1410 Wilmington, Delaware 19801 Telephone: (302) 652-3131 Facsimile: (302) 574-2103 Email: svanaalten@coleschotz.com ddean@coleschotz.com jalberto@coleschotz.com - and - PAUL HASTINGS LLP Luc A. Despins (admitted pro hac vice) G. Alexander Bongartz (admitted pro hac vice) 200 Park Avenue New York, New York 10166 Telephone: (212) 318-6000 Facsimile: (212) 319-4090 Email: lucdespins@paulhastings.com alexbongartz@paulhastings.com Counsel toDebtors and Debtors in Possession

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