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Eagle Hospitality Trust's sponsor directors to resign

HOWARD Wu and Taylor Woods, co-founders at Eagle Hospitality Trust's (EHT) sponsor Urban Commons, plan to step down from the trust managers' boards of directors.

Their resignations are expected to take effect by May 26, 2020, subject to formalities, the EHT managers announced in a bourse filing on Wednesday morning.

Last week, the Singapore Exchange (SGX) asked the managers' nominating and remuneration committee to justify why it considered both sponsor directors still suitable to continue serving on the boards, after the EHT managers had uncovered "prejudicial" interested-person transactions involving non-executive chairman Mr Wu and deputy chairman Mr Woods.

The managers' US lawyers discovered that Mr Wu and Mr Woods had done deals on behalf of EHT's master-lessor subsidiaries, which supposedly agreed to guarantee the payment and performance of all obligations of the Urban Commons master lessees with some exceptions, under "further non-disturbance agreements".

The master lessors would also assume all the obligations of the master lessees if the master lease agreements were to be terminated, including obligations that pre-dated such terminations.

The EHT managers' audit and risk committee said last week it was of the view that the inking of these transactions was "not on usual commercial terms" and therefore was "prejudicial" to the interests of EHT and its minority stapled securityholders.

SGX also pointed out that the "further non-disturbance agreements" were not internally reported, disclosed and declared in accordance with compliance policies, and copies of the agreements were also not provided to the EHT boards before they were signed by the master lessors.

On Wednesday evening, Urban Commons issued a statement to The Business Times, stating that it has been in talks for six months regarding potential "partnerships" with Asia-based companies.

"We aim to bring on board a new strategic partner at the Manager level to stabilise, strengthen and improve operations. In line with this, Howard Wu and Taylor Woods will step down from the board... We look forward to announcing our new partner once the approval is completed and details of the partnership are finalised," the Los Angeles-based real estateĀ investment and development firm said in the statement.

Trading in EHT stapled securities has been suspended since March 24, 2020.

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