More shocking bad news came out from Eagle Hospitality Trust (“EHT”). On 15 May 2020, EHT did not just released their Q1 2020 financial results but also took the opportunity to announce that the key Sponsor directors, Howard Wu and Taylor Woods have imposed contractual terms on EHT that are prejudicial to the interest of the security-holders of EHT. Apparently, both Howard and Taylor signed up terms that are not in accordance with commercial market terms for the Non-Disturbance Agreements between Lessor and Lessee. EHT will now need to assume all liabilities from the bankrupted lessee even before the termination date of the agreement. This adds a whopping USD44.6 Million of additional liabilities to EHT and its security-holders.
1. Management of EHT claimed kept in the dark by Sponsor’s Directors while Sponsor’s Directors claim that they are not aware that they did not inform due to “miscommunication”.
Most surprising aspect was that according