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Struggling New York City hotels want Mayor Bill de Blasio to forgive the 18% interest they must pay when they are late on their property-tax bills, Bloomberg News reported. A trade group that represents brands such as Marriott, Hilton and Sheraton as well as smaller boutique hotels is asking the city to forgive or reduce interest charges, much as it has done with other commercial properties. They say the added payments burden an industry pummeled by the pandemic, and if the city wants hotels alive when tourists return, it should offer relief. New York hotel rooms were 36% occupied in December 2020, down from 88% a year ago, according to lodging data provider STR. Rooms went for an average $130 a night in December, down from $303 a year ago, STR said. Vijay Dandapani, president of the Hotel Association of New York City, which asked for the relief, said the industry is like a critically ill patient clinging to life. He estimates the occupancy rate in the city is closer to 10%. “You’re just going to have hotels go belly up permanently if you charge 18% on top of a property tax that’s already a struggle to pay,” Dandapani said. “There’s a chance of revival if you’re comatose, but if you’re dead, there’s no coming back.” At stake is tens of millions of public dollars derived from property taxes and penalties. Budget officials expect the city to lose about $10.5 billion in revenue through June of 2022 due to the pandemic. That’s created challenges in balancing the $92 billion budget. 

Marriott International Inc. was denied its request to move the chapter 11 case of a Washington, D.C., hotel to the nation’s capital, with a bankruptcy judge saying the property’s venue choice should carry significant weight and that in this case a transfer was unnecessary, WSJ Pro Bankruptcy reported. Marriott Wardman Park, which the hotel chain had managed, sought protection from creditors in January in the U.S. Bankruptcy Court in Wilmington, Del. The 1,152-room property’s secured lender and sole owner is Pacific Life Insurance Co. One of Marriott’s arguments was that other bankruptcy cases involving a single real estate property have been moved near to their location. Bankruptcy Judge John Dorsey said yesterday that those cases involved real estate businesses with significant day-to-day operations and many employees.

A proposed bankruptcy loan of up to $125 million for the operator of the Queen Mary Hotel and other high-end lodgings has come under fire from lender Bank of America Corp., which said the financing package benefits the owners and managers but doesn’t do much for the distressed business, <em>WSJ Pro Bankruptcy</em> reported. U.S. units of Singapore-based Eagle Hospitality Real Estate Investment Trust filed for bankruptcy protection Jan. 18, with most of its properties closed. Bank of America said in court papers filed Thursday that a proposed borrowing, supplied by a hedge fund to sustain the enterprise, amounts to a blank check for investors “who, prior to chapter 11, showed an almost preternatural instinct for wasting money.” With 15 properties, only two of them in operation, Eagle Hospitality needs to look for buyers, before the market is glutted with emptied hotels, according to the bank. There are buyers ready to buy and reopen some of the properties, the bank said. The bank’s advisers think it is better to keep the hotels operating at low occupancy, instead of closing them completely. “An open hotel can keep the paint fresh and book rooms for the future. A closed one cannot,” the bank said. Bank of America’s objection was filed in the U.S. Bankruptcy Court in Wilmington, Del., where Eagle Hospitality Group filed its chapter 11 petition and which must sign off on the proposed loan. Another lender, Deutsche Bank AG New York Branch, joined in Bank of America’s objections.

Mudrick Capital Management LP, the hedge fund that provided a much-needed lifeline to AMC Entertainment Holdings Inc. in December, is sitting on hundreds of millions of dollars in gains following last week’s rally in the price of AMC’s shares, WSJ Pro Bankruptcy reported. The New York-based firm made $200 million in profit, mostly from its holdings in AMC debt. Mudrick’s gains derive from a combination of paper gains and realized trades. Last week, AMC shares nearly tripled in value as the cinema chain’s stock caught the attention of individual investors swarming popular Reddit forums who were looking to repeat the dizzying rally seen in shares of GameStop Corp. Most of Mudrick Capital’s gains, however, are from its holdings in the company’s bonds, which rallied as the company’s share price increased. The firm also made about $50 million writing call options last week in the midst of the buying frenzy. The call options will enable holders to buy shares from Mudrick at a predetermined price. When Mudrick provided AMC with the new loan, the firm also received AMC shares as part of its commitment fee, as well as part of a swap of some of the firm’s holdings in junior AMC bonds. In that transaction, Mudrick swapped $100 million in AMC debt for shares.

A private-equity firm that owns a chunk of AMC Entertainment Holdings Inc.’s bonds is converting them into equity following a remarkable rally in the cinema giant’s stock, as AMC struggles to ward off bankruptcy amid closures of movie theaters during the pandemic, WSJ Pro Bankruptcy reported. AMC’s share price quadrupled this week after the company inked a substantial debt and equity raise and subsequently became the latest stock to be touted by the online community of retail investors who helped pump up GameStop Inc. AMC said yesterday that Silver Lake Group LLC on Thursday has elected to convert the $600 million of convertible notes it owns into equity. The Silver Lake swap illustrates how AMC and other volatile companies caught up in the retail trading mania can benefit from surges of bullish sentiment, in this case enabling AMC to cut approximately a tenth of its roughly $6 billion in debt. After closing at $19.90 a share on Wednesday, having more than quadrupled in value from the start of the week, AMC’s stock retraced much of its gains, closing at $8.63 on yesterday, down about 56.6%. AMC share trading was restricted on Robinhood Markets Inc. and other popular online brokerages yesterday, drawing sharp rebuke from individual investors. Menlo Park, Calif.-based Silver Lake bought its unsecured notes in 2018, gaining a seat on AMC’s board. After the coronavirus pandemic forced AMC to temporarily close nearly all of its roughly 1,000 cinemas around the world, Silver Lake entered into a deal to convert its unsecured notes into a new first-lien convertible bond, meaning it would have first dibs on AMC’s assets in the event of a default.

AMC Entertainment Holdings Inc. is considering raising money by selling more stock, capitalizing on the unprecedented runup in its shares this week, Bloomberg News reported. A stock sale would follow AMC announcing $917 million in fresh financing Monday, which helped it stave off the threat of bankruptcy. On Wednesday, it said that it completed a previously announced at-the-market equity program, raising $305 million. AMC has benefited from a Reddit-fueled investing frenzy that sent heavily shorted stocks into the stratosphere this week. Though the stock plummeted on Thursday —hurt by Robinhood and other trading platforms curbing trading in its shares — AMC remains up 307% this year.

After months of fighting to avoid bankruptcy, cinema giant AMC Entertainment Holdings Inc. rode Wednesday’s trading frenzy to a triple-digit share rise, opening a window for the company to exploit the speculative mania to help survive the pandemic, WSJ Pro Bankruptcy reported. The movie theater chain’s shares catapulted 300% on Wednesday as revved-up retail traders bet on AMC as the next meme stock, cheered by posters on the Reddit forum WallStreetBets where newbie investors gathered to encourage each other to fuel GameStop Corp.’s dizzying rally. “AMC is clearly next,” one poster wrote Wednesday, adding several rocket ship emojis. “Double down AMC wooo,” another user said. The company has spent months vying to stay afloat, unable to open its movie theaters to full capacity because of the coronavirus pandemic and starved of fresh content by Hollywood studios that began releasing flicks straight to streaming. Burning cash at a rate of roughly $100 million a month, AMC last month began selling stock to the public with a bankruptcy warning attached, saying that a failure to raise enough capital could mean chapter 11.

Shares of AMC Entertainment Holdings Inc. rose almost 26% after the movie theater giant said it signed deals for $917 million in financing to survive the COVID-19 pandemic for months longer without resorting to bankruptcy, WSJ Pro Bankruptcy reported. Investment deals signed by the embattled movie theater chain have brought in $411 million in debt financing and $506 million in equity since mid-December as AMC took advantage of equity markets’ robust appetite for risk and a thirst for returns in fixed income that has driven yield on the riskiest junk debt to record lows. Investors have proven willing to support struggling companies during the pandemic, even those that have been hit hard by social-distancing and travel restrictions, such as theaters, cruise lines and hotels. The rollout of COVID-19 vaccines has given investors incentive to keep beaten-down companies like AMC afloat and help them avoid a costly debt default or bankruptcy, though the sluggish vaccination rollout also poses a risk. With the deals announced yesterday, AMC Chief Executive Adam Aron said that the possible bankruptcy filing the company had previously warned about was now “completely off the table.” The company said its financial runway has now been extended deep into 2021 and that while an increase in cinema attendance seems likely, the future course of the coronavirus meant that cash needs remained uncertain.

Eagle Hospitality Trust, the Singapore-based group that operates the iconic Queen Mary and the Sheraton Pasadena, has filed for chapter 11 protection, the Los Angeles Business Journal reported. In total, more than two dozen hotels and other properties were part of the filing by the company, which has more than $500 million in debt. Eagle Hospitality stopped trading on the Singapore Stock Exchange in 2019 after defaulting on a loan from Bank of America. While the company operates the Queen Mary, the city of Long Beach owns the property, and Eagle Hospitality has a ground lease. The Queen Mary has been closed to the public since May due to the pandemic. Investment firm Urban Commons signed a lease to run the Queen Mary in 2016. In 2019, it created Eagle Hospitality Trust but ran into trouble. In the fall, the group ended its master lease agreements for Urban Commons hotels.

Movie theater giant AMC Entertainment Holdings Inc. signed deals for $917 million in financing to survive the Covid-19 pandemic for months longer without resorting to bankruptcy, the Wall Street Journal reported. AMC, the world’s largest movie theater chain, said it had executed a commitment letter for $411 million in debt financing through increasing the size of and refinancing a European credit facility while raising $506 million in equity since mid-December. “This means that any talk of an imminent bankruptcy for AMC is completely off the table,” said Chief Executive Adam Aron. The company had warned about its risk of bankruptcy since late last year. With the deals, AMC said that its financial runway has now been extended deep into 2021 and that while an increase in cinema attendance seems likely, the future course of the coronavirus means the company’s cash needs remain uncertain. The company also said that it presumed it would continue to make progress in negotiations with theater landlords over lease payments. Investors have been willing to keep AMC afloat even as it burned cash and theaters stayed largely dark as infections surged late last year. The pandemic has hit AMC hard as restrictions on indoor gathering forced the company to temporarily close most of its more than 1,000 theaters world-wide. AMC and its peers also face a challenge from major Hollywood studios that have either delayed releasing films or released them straight to streaming services during the pandemic, leaving cinemas with little content to show those viewers willing and able to brave a trip to the big screen. Warner Bros. said earlier this month that it would release its entire 2021 slate of films simultaneously in theaters and on its HBO Max streaming service, a drastic step in eliminating the exclusivity that theater chains have enjoyed for decades.