LuxUrban Hotels Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement
UNITED STATES
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| Item 1.01 | Entry Into a Material Definitive Agreement. |
On June 6, 2025, LuxUrban Hotels Inc. (the “Company”) entered into a Stipulation of Settlement (the “Settlement Agreement”) with 123 Washington LLC (the “Landlord”) in connection with litigation concerning the Company’s leasehold interest in the hotel property located at 123 Washington Street, New York, New York.
Under the terms of the Settlement Agreement, the Company has agreed to make a total settlement payment of approximately $3.4 million, payable in installments through November 2026, in full satisfaction of a previously entered judgement in excess of $12 million. To fund a portion of the settlement, the Company utilized $2.625 million in previously restricted cash deposits that had been held in escrow under the lease.
Additionally, but included in the total of $3.4mm the Company will satisfy approximately $2.57 million in accrued obligations to the New York Hotel Trades Council and Hotel Association of NYC Benefit Funds (collectively, the “Union Funds”), representing outstanding contributions jointly owed by both the Company and the hotel under the applicable Industry-Wide Agreement (IW/A) assumption agreement. Rather than remitting payment directly to the Union Funds, the Company will make monthly payments of approximately $183,000 to the Landlord, who will assume responsibility for forwarding these payments to the Union Funds in accordance with the terms of the settlement agreement. Each payment made by the Company to the Landlord on behalf of the Union Funds will reduce the Company’s remaining liability to the Landlord on a dollar-for-dollar basis. The lease for the 123 Washington Street property is deemed terminated, and the Company has agreed to surrender possession of the premises no later than June 6, 2025.
The Settlement Agreement also provides for the elimination of approximately $7.5 million in additional liabilities, including use and occupancy arrears, which will no longer be reflected on the Company’s balance sheet. The Company and the Landlord, along with their respective affiliates and related parties, have exchanged mutual released, which become effective upon the Company’s continued compliance with the Settlement Agreement. All pending litigation, including actions involving any guarantor, will be dismissed upon execution of the Settlement Agreement and the timely surrender of the hotel premises.
When combined with the previously disclosed settlement related to Hotel 57—which included a $2.2 million cash payment for accrued union benefit obligations and a general release of liability—the Company has reduced or satisfied approximately $7.1 million in union-related obligations over the past 60 days. This includes both direct payments and structured commitments that address legacy union liabilities across its portfolio.
The Company believes this agreement represents a significant step in resolving legacy obligations, improving its financial position, enhancing cash flow predictability, and reinforcing its commitment to both stakeholders and workforce partners.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: June 12, 2025 | LUXURBAN HOTELS INC. | ||
| By: | /s/ Michael James | ||
| Name: | Michael James | ||
| Title: | Chief Financial Officer | ||
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