Bankrupt hotel chain Eagle Hospitality Real Estate Investment Trust alleged in a court filing that two of its big investors received $2.4 million in federal coronavirus aid on behalf of its Queen Mary operations, but used the money for their own benefit, WSJ Pro Bankruptcy reported. In a filing Friday in the U.S. Bankruptcy Court in Wilmington, Del., Eagle Hospitality said Taylor Woods and Howard Wu defrauded the unit, Urban Commons Queensway LLC, last year by getting a Paycheck Protection Program loan in that business’s name, even though they lacked the authority to do so, and then took the money. Woods said yesterday that the allegations are unfair and incorrect. Wu said that there was never any intention to do anything inappropriate involving the PPP loan. Urban Commons Queensway said it asked Woods and Wu to return the loan proceeds by last Thursday, but the request has gone unmet. The company said the loan proceeds have been rapidly depleted in ways that the U.S. Small Business Administration didn’t intend. The loans are eligible for forgiveness if they are mostly used to avoid layoffs. Urban Commons Queensway said it is concerned that if it doesn’t get a preliminary injunction, the assets could be diverted to “unreachable locations.” Eagle Hospitality has said it worries it could be on the hook for repaying a loan that it never received. More than two dozen U.S. units of Singapore-based Eagle Hospitality Real Estate Investment Trust filed for bankruptcy in January. Days later, Eagle Hospitality also filed for bankruptcy in the U.S.
