Park Hotels & Resorts Inc. Announces Lawsuit Related to $725 Million Non-Recourse CMBS Loan Secured By Two of its San Francisco Hotels
26 Ottobre 2023 - 12:30PM
Park Hotels & Resorts Inc. (NYSE: PK) (“Park” or the “Company”)
announced today that the trustee under the $725 million
non-recourse CMBS loan (“Loan”), by and through its special
servicer, filed a lawsuit against the borrower entities related to
the cessation of payments on the Loan. In connection with the
lawsuit, the trustee requested the appointment of a receiver to
take control of the hotels securing the Loan – the 1,921-room
Hilton San Francisco Union Square and the 1,024-room Parc 55 San
Francisco. Once appointed by the court, the receiver will have
complete and exclusive control and possession of the hotels and
will maintain Hilton and its workforce to manage the ongoing
operations at the hotels. In addition, if appointed by the court on
the terms stipulated between the special servicer and the
borrowers, the receiver will have the ability to market the hotels
for sale and have until September 1, 2024 to consummate a
transaction, subject to a 60-day extension if the hotels are under
contract by September 1, 2024. As further stipulated between the
special servicer and borrowers, if the hotels are not sold within
the predetermined sale period then the receiver will no longer have
the authority to sell the hotels and the receivership will end with
a non-judicial foreclosure. The Company anticipates appointment of
a receiver will occur within the next few business days.
Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer,
stated, “Today’s filing and anticipated appointment of a receiver
is a positive step forward. The receivership will place control of
the hotels as well as the benefits and burdens of their operations
with the trustee and the court-appointed receiver. As the San
Francisco market continues to face an elongated recovery, we
believe the transfer of control and ultimate transfer of title to
the hotels is in the best interest of our shareholders. While final
resolution of the Loan may not occur until sometime next year, be
it through sale or foreclosure, today’s filing will allow Park to
move forward without enduring the economic impact of these assets
and the Loan. We have been working with the servicer in good faith
since June and will continue to cooperate and assist as the
receiver requests to effectuate an acceptable outcome for all
stakeholders in this difficult but necessary
process.”
Park expects to provide an update on the lawsuit and anticipated
receivership as well as further details about any impacts to
guidance and dividends that may result from the appointment of a
receiver in its earnings release and during its earnings call in
early November.
The filings in the lawsuit (Civil Case Number CGC-23-609935) are
available from the court at this link
https://sf.courts.ca.gov/online-services/case-information.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements include, but are not limited
to, statements related to the anticipated effects of Park’s
decision to cease payments on its $725 million CMBS loan and the
effects of the lender’s exercise of its remedies, including placing
such hotels into receivership, as well as Park’s current
expectations regarding the performance of its business, financial
results, liquidity and capital resources, including anticipated
repayment of certain of the Company’s indebtedness, the completion
of capital allocation priorities, the expected repurchase of the
Company’s stock, the impact from macroeconomic factors (including
inflation, increases in interest rates, potential economic slowdown
or a recession and geopolitical conflicts), the effects of
competition and the effects of future legislation or regulations,
the expected completion of anticipated dispositions, the
declaration and payment of future dividends and other
non-historical statements. Forward-looking statements include all
statements that are not historical facts, and in some cases, can be
identified by the use of forward-looking terminology such as the
words “outlook,” “believes,” “expects,” “potential,” “continues,”
“may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,”
“intends,” “plans,” “estimates,” “anticipates” or the negative
version of these words or other comparable words.
Forward-looking statements involve risks, uncertainties and
assumptions. Actual results may differ materially from those
expressed in these forward-looking statements. You should not put
undue reliance on any forward-looking statements and Park urges
investors to carefully review the disclosures Park makes concerning
risk and uncertainties in Item 1A: “Risk Factors” in Park’s Annual
Report on Form 10-K for the year ended December 31, 2022, as such
factors may be updated from time to time in Park’s filings with the
SEC, which are accessible on the SEC’s website at www.sec.gov.
Except as required by law, Park undertakes no obligation to update
or revise publicly any forward-looking statements, whether as a
result of new information, future events or otherwise.
About Park Hotels &
ResortsPark is one of the largest publicly-traded
lodging REITs with a diverse portfolio of iconic and market-leading
hotels and resorts with significant underlying real estate value.
Park's portfolio, exclusive of the Hilton San Francisco Union
Square and the Parc 55 San Francisco currently consists of 43
premium-branded hotels and resorts with over 26,000 rooms primarily
located in prime city center and resort locations. Visit
www.pkhotelsandresorts.com for more information.
For more information, contact:Ian
WeissmanSenior Vice President, Corporate
Strategy571-302-5591iweissman@pkhotelsandresorts.com
For additional information or to receive press
releases via e-mail, please visit our website
atwww.pkhotelsandresorts.com
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