URBAN Commons Queensway (UCQ), a unit of embattled Eagle Hospitality Trust (EHT), has been granted approval by the United States Bankruptcy Court to reject the lease and operational agreements to the Queen Mary property on July 7, DBS Trustee announced in a regulatory filing on Tuesday.
The Queen Mary property is a former ocean vessel-turned-floating hotel that was earlier surrendered by UCQ to the City of Long Beach, California, on June 4.
With the latest court order, UCQ no longer holds the leasehold interest in the Queen Mary property.
DBS Trustee, as trustee of Eagle Hospitality Real Estate Investment Trust (EH-Reit), also said that it will update stapled securityholders of any developments regarding the earlier announced Chapter 11 cases and EHT's remaining properties at the appropriate time.
The EHT entities decided to file the motion due to a lack of viable prospects of selling off the interest in the Queen Mary property in an auction, DBS Trustee said in an earlier announcement.
Substantial cure costs which a buyer will have to pay, and the substantial capital improvements required by the Queen Mary property made it a challenge to find a suitable buyer, it added.
In January this year, EHT filed for Chapter 11 bankruptcy. Five of its properties put up for auction received qualified bids in late May.
EHT is a stapled group comprising EH-Reit and the dormant Eagle Hospitality Business Trust. Its stapled securities have been suspended since March 24, 2020, after EH-Reit defaulted on a loan of US$341 million.