Eagle Hospitality Trust receives Notice of Breaches (Legal Notice)

SINGAPORE – Media
OutReach – 12 August
2020 – In a Breach Notice sent to Eagle Hospitality Trust (EHT or REIT), Urban Commons (UC or Sponsor or Master Lessee), the Los Angeles-based real estate investment and development firm and Sponsor of EHT, has intimated that the amount of funds it has injected into EHT over the past year are outstanding and due for repayment.

The Sponsor has a plan to provide critically needed financial support to EHT; however, it has been unable to obtain cooperation to implement this plan from the designated trustee, DBS Trustee Limited (Trustee), the Special Committee (SC) and EHT’s third party advisors and consultants. Prior to March 2020, there was no default from operations and yet, since the onset of COVID-19, the Sponsor has been targeted with allegations. In contrast, the Sponsor wishes to highlight that its portfolio of non-REIT assets, thanks to careful and collaborative negotiations with creditors, has not defaulted. This demonstrates the Sponsor’s ability to navigate through this difficult period of economic hardship due to COVID-19 and other unexpected calamities.

The Notice also points out that despite the millions of dollars in excess of the audited hotel income that the Sponsor has provided to EHT to subsidise rent and other reserves paid by the hotels under the Master Lease Agreements (MLAs), EHT and its advisors have levelled allegations against the Sponsor and Master Lessee. This has forced the Sponsor to issue the Legal Notice to ensure that the unitholders, regulatory authorities, and the general public are aware of both sides of the story.

Since the crisis triggered by the COVID-19 pandemic struck, the Sponsor has tried to approach the Trustee with proposals, in the hope of stabilising the position of EHT. To date, however, these plans have not been met with constructive responses from the Trustee.

The Sponsor is saddened to discover that it appears substantial amounts of EHT’s cash, potentially worth millions of dollars, is being spent each month as retainer fees for professional consultants who are refusing to work with the Sponsor to find a way out of the crisis. Instead of working with the Sponsor, announcements have been published without reflecting submissions from the Master Lessee and its US Counsel over the last few months. This has left the Sponsor with no choice but to serve the Legal Notice and also to highlight that EHT has legal obligations to the Master Lessee which are not being fulfilled.

The Sponsor believes it is time to put the record straight in relation to the REIT’s description of alleged missed rent payments, financial discrepancies, and recent defaults. The Sponsor is using this opportunity to explain that it has not benefitted financially since the IPO and, on its part, has done everything it could to help the Lessees maintain the monthly Fixed Rent, worth millions of dollars above the total income produced by the hotel properties, and provided urgently needed property maintenance costs despite adverse conditions, keeping the interests of EHT and its unitholders in mind.

In relation to the above, Mr. Howard Wu and Mr. Taylor Woods, Co-Founders and Principals at Urban Commons, have issued the following statement:

“It saddens us to issue such a notice to EHT but we feel we have exhausted all other avenues to find an amicable solution to the differences between EHT, the Trustee and Urban Commons. Multiple plans aimed at resolving the issue, circulated by us since April this year, have not been met with constructive responses from EHT’s advisors. Furthermore, their comments may have led EHT into taking unnecessary steps that appear to have not only consumed precious time during a global pandemic, but also millions of EHT unitholders’ dollars.

“COVID-19 has resulted in unprecedented challenges for the hospitality industry worldwide, and as the Sponsor and one of the major unitholders of EHT, UC wants to apologise to all unitholders regarding how the current situation has escalated. At the onset of the pandemic, the Sponsor did not anticipate COVID-19’s path of destruction, however, now is the time to unite and work together collaboratively to navigate out of this pandemic. As one of the largest unitholders, the merits of our plan is to minimise cost, refinance the defaulted Bank of America Merrill Lynch (BAML) debt, control unnecessary expenses, minimise dilution for all unitholders and raise enough funds to survive COVID-19. Since April, we have been sharing with EHT’s advisors extensive strategies to navigate the storm and these plans have, to date, not been responded to by these advisors in a constructive or collaborative spirit. This meaningless conflict is a recipe for disaster, especially during an unprecedented pandemic situation.”

Interpretation of Force Majeure

Regarding the two Force Majeure scenarios, both Mr. Wu and Mr. Taylor note:

(i) Category 5 Hurricane

A hurricane which hit EHT’s largest hotel in Orlando, along with the current global pandemic – which set in motion a casualty clause in the MLA, “means the Orlando Hotel Lessee was not required to pay Fixed Rent from September 2019 through to the present”. He adds: “This overpaying of approximately US$3 million rent was overlooked by EHT and yet was identified in the Sponsor’s 2019’s financial and reconciliation review. Our position is that the overpaid rent should have been used to offset Fixed Rent in January 2020.”

(ii) Force Majeure attributable to COVID-19

Mr. Wu and Mr. Taylor add: “From February 2020 onward, Fixed Rent payments are required to be abated pursuant to the Force Majeure provisions of the MLA as a result of COVID-19.

“The Sponsor owns the Lessees that are in normal circumstances (except in Force Majeure situations) obliged to pay rent out of the hotel income generated to the Lessors under the MLAs. Since the IPO on May 24, 2019, the Sponsor has contributed millions of dollars in excess of the audited hotel income generated by the hotel properties from IPO until March 2020. Yet, at every turn, UC has been met with negative – often damaging – responses, which have been played out in the Singapore media.

“The SC formed on March 31, 2020, together with the Trustee, inducted a number of different third-party advisors and lawyers in the US and in Singapore who have not only taken control of EHT’s assets in the US but also sought to intervene in the Sponsor’s business. Their approach, which to us is non-commercial and adversarial, has damaged our reputation with creditors and the public alike.”

Mr. Wu reiterates that the Sponsor has a plan, and “it is positioned to be able to execute the plan promptly, efficiently and effectively if there is cooperation from EHT and the Trustee. Just one year ago, the Sponsor raised close to US$660 million to form EHT. The Sponsor has a plan to refinance the current debt, raise additional capital and ultimately save EHT. The Sponsor believes it is time to unite, that its plan can work, but it needs all parties involved to cooperate and work in unison.

“The hotel industry is facing one of its biggest challenges to date, and we have asked for the same trust, flexibility and goodwill from EHT and DBS Trustee that the Sponsor has demonstrated, including paying above the hotel-generated income since time of IPO, providing multiple solutions consistent with commercial practices between lenders and other public companies experiencing the impact of COVID-19. However, it appears that EHT, on its advisors’ recommendations, is continuing to permit activities which may rapidly consume EHT’s cash resources, including soliciting a process to bring in a new partner that is likely to take several months before a successful tenderer and its plan may be approved for execution. It is the Sponsor’s view that EHT would be better served by immediate steps to stabilise and recapitalise it. In our opinion, the longer EHT delays in implementing the Sponsor’s proposal, the more likely it is that this process will consume a larger proportion of the EHT’s cash resources. There is an inherent risk associated with the uncertainty, misalignment, additional time delays and other complications associated with introducing a new unknown party at this critical stage.”

“EHT is not alone in confronting the prospect of a costly restructuring process, which may ultimately dilute unitholders’ value if all parties do not cooperate and the process takes too long.”

In order to survive the current pandemic, there is an urgent need to unite, compromise and rise above the mire of potential disputes and entrenched positions. “In the US, several publicly traded hospitality REIT landlords have entered into lease modifications with their tenants to navigate COVID-19. These uncertain times require collaboration and creative teamwork to find solutions to the unprecedented challenges being presented as a direct result of the current global pandemic,” Mr. Wu notes.

Sponsor has the experience and capability to stabilise EHT

“The Sponsor’s successful track record of raising capital in both the US and Asia demonstrates that it is in the best position to fix the REIT’s issues; however, this requires communication and a deliberate union of the parties involved,” Mr.Wu says.

He adds: “We need everyone to work together and stop burning EHT’s cash on items that are clearly not survival related. We hope this Notice of Breaches prompts EHT and its advisors to hear our plans and understand that we are presenting the best solution to navigate this difficult time.

“As substantial unitholders in EHT, Mr. Taylor Woods and I have a significant interest in the well-being of EHT and to that end we have worked tirelessly to generate in excess of US$32 million in rent and reserves for EHT, paying more in Fixed Rent than the hotel’s total income in 2019, according to fully audited financials.

“Outside of the REIT’s portfolio, the same Sponsor has successfully negotiated with creditors to navigate the current global pandemic. EHT’s one-sided announcements overlook all of the Sponsor’s positive actions, not only making it less likely for the Sponsor to create holistic solutions with creditors of the 18-hotel portfolio; it is in-turn damaging EHT in the process.

“The Sponsor has provided EHT a plan to deal with creditors and is fully confident that it can effectively execute it if all parties work together amicably and each do their part. The Sponsor’s plan will clear all defaults and provide creditors with the solutions necessary to work together once more.”

In addition to the Notice of Breaches letter, both Mr. Wu and Mr. Taylor Woods have sent a letter to the advisory firm appointed by EHT to restructure its portfolio, dated August 5, 2020. The letter rebuffs the purported “forensic accounting investigation”, stating:

“Given Urban Commons’ voluntary efforts to support the hotels financially and the master lessees full compliance with their reporting obligations under the MLA, we believe that your demand for additional information and the threatened forensic accounting investigation are bad faith efforts to damage the reputation of Urban Commons by attempting to create some appearance of wrong-doing. Such bad faith efforts are contrary to the best interests of the hotels and the REIT shareholders.”

In regard to the investigation, Mr. Wu adds: “As a substantial unitholder, I am concerned that the advisors are simply wasting time and money to check on the financial statements of the Master Lessee. Instead of focusing on executing plans to ensure that the EHT portfolio survives through this pandemic, the advisors announced that they are conducting a forensic accounting investigation on the Master Lessee and the Sponsor, intentionally giving the market the impression that there was wrongdoing by the Sponsor and the Master Lessee. This has not only caused anxiety and concern to unitholders; it has also generated mistrust among unitholders about us and caused huge damage to our reputation. When asked to clarify the statement, they have simply ignored us.”

About Urban Commons

Urban Commons is a Los Angeles-based real estate investment and development firm with a successful track record of developing, repositioning, and rebranding assets throughout the United States. The company focuses on improving under-managed and under-utilised assets by developing innovative solutions that promote optimal economic, social, and environmental returns.

Since its founding in 2008, Urban Commons has owned, operated and developed a variety of real estate properties including several dozen hotels, apartments, retail, office, and senior care, throughout the United States including the development of nearly one million square feet of commercial retail space.

For more information on Urban Commons, please visit: https://urban-commons.com/ 

Donate Personal Protective Items to Students from Low-Income Families as the First Wave of a three-phase program

HONG KONG, CHINA – Media OutReach – 12 August 2020 – RB
is always driven by its purpose to put people first so as to protect, heal and
nurture in a relentless pursuit of a cleaner, healthier world. As the Covid-19
health crisis continues in Hong Kong, RB Hong Kong has initiated the Community
Anti-Epidemic Support Programme to join hands with local non-profits organizations
to offer quality personal protection and disinfection products to support those
in need in Hong Kong.

Donations of personal protective items include Dettol
Hand Sanitizer Original, Dettol Anti-Bacterial Wet Wipes and Aerogard Odourless
Insect Repellent Spray to fully protect the health of students.

RB Hong Kong’s Community Anti-Epidemic Support Programme
(“the Program”) will work in partnership with 5 to 6 non-profit organisations
to offer assistance to different local communities in 3 phases. The Programme
will broadly cover students, as well as low-income families, women and elderly.
Answering the needs of different groups in the community, RB Hong Kong will offer
support from protective and disinfection products to home deep cleaning
services to support personal and family health and hygiene. Total face value of
operation and in-kind donation of the Program worth over HKD6.8 million.

The Hong Kong Council of Early Childhood Education and
Services (CECES) is RB Hong Kong’s partner for the first phase of the
Programme. CECES has been proactive in disseminating health information among
schools and wider communities. During the pandemic, CECES has also assisted
schools, communities and families to procure needed supplies to ensure the
health and safety of students. In the first phase of the Programme, CECES will
work in conjunction with RB and its brands Dettol and Aerogard to donate
personal protective items, including Dettol
Hand Sanitizer Original, Dettol Anti-Bacterial Wet Wipes and Aerogard Odourless
Insect Repellent Spray, to 40,000 needy students to ensure that their health
and hygiene are to fully protect during the pandemic.

Ms. Sansan Ching Teh Chi, Founder and Director of the
CECES, said, “This year, the global pandemic has posed a serious threat to Hong
Kong’s public health and a great number of experts have stressed the importance
of handwashing and on the use of hand sanitizers and disinfecting wipes to
mitigate the risk of virus infection. We wholeheartedly thank RB and its brands
for their warm support of low-income and disadvantaged families and students in
such times of hardship and adversity.”

Mr. Pankaj Agarwal, General
Manager Hong Kong & Taiwan, Health, RB Hong Kong, added, “Hygiene is a foundation
for health, and it is also the key to breaking the chain of infection. RB
believes the highest-quality hygiene, wellness and nourishment is a right, not
a privilege, for everyone. Through our cooperation with the CECES in the first phase of the Community
Anti-Epidemic Support Programme, we hope to ease the burden on low-income and
disadvantaged families, parents and students as we are all combating this
pandemic together.”

Mr. Boudewijn Feith, General Manager Greater China,
Hygiene, shared “In addition to the great distress caused by the pandemic,
disadvantaged families in Hong Kong also face mosquito-borne diseases. By
donating personal protective items to students, RB hopes to ensure
comprehensive personal protection for students so that they could rise to the
challenges ahead in the new school year.”

The distribution of personal anti-epidemic care materials
co-organised by the CECES and RB now accepts school applications until 31
August 2020. Interested schools could contact the Healthy Living Team of the CECES
for any inquiries.

About RB

RB* is driven by its purpose to protect, heal and nurture in a
relentless pursuit of a cleaner, healthier world. We fight to make access to
the highest-quality hygiene, wellness and nourishment a right, not a privilege,
for everyone.

RB is proud to have a stable of trusted household brands found in
households in more than 190 countries. These include Enfamil, Nutramigen,
Nurofen, Strepsils, Gaviscon, Mucinex, Durex, Scholl, Clearasil, Lysol, Dettol,
Veet, Harpic, Cillit Bang, Mortein, Finish, Vanish, Calgon, Woolite, Air Wick and
more.  20 million RB products a day are
bought by consumers globally.

RB’s passion to put consumers and people first, to seek out new
opportunities, to strive for excellence in all that we do, and to build shared
success with all our partners, while doing the right thing, always is what
guides the work of our 40,000+ diverse and talented colleagues worldwide.

For more information visit www.rb.com

*RB is the trading name of the Reckitt Benckiser group of companies

About Hong Kong Council of Early Childhood Education and Services

Hong Kong Council of Early Childhood Education and Services (CECES) was
established in 1982. It is recognized by the Hong Kong government as a social
working charity. CECES believes that everyone is born equal, via informal
education, children’s talent and potential can be nurtured and developed.
CECES’ aims are targeted to provide education to low-income children and
families.

Over the past 38 years, CECES has organized different varieties of
educational activities to Kindergartens, Primary Schools and Secondary Schools,
such as multiple intelligence programs, teacher’s training, parent-child
workshop, seminar, and survey, etc.  Each
year, more than 200,000 families have benefited from these efforts. CECSE has
always been pioneering innovation, advocating diversified education and
organizing related activities, promoting the development of early childhood
education and family service in Hong Kong.

BEIJING, CHINA – Media
OutReach – 12 August
2020 – The anime
“A Whisker Away”, also known as “Wanting to Cry, I Pretend to Be a Cat”, was
premiered on June 18, 2020, and streamed in China through Xigua Video, Douyin
and Toutiao. It is another Xigua Video simultaneous global streaming with
Netflix after the BBC Series Dracula. It is reported that the film is available
to paying subscribers on the above platforms.

“A Whisker Away” is co-directed by famous
Japanese directors Junichi Sato and Tomotaka Shibayama. It is a fantasy of the
young girl Miyo Sasaki nicknamed “Muge”. She finds a mask that would
turn her into a cat. As a cat, she becomes the intimate friend of the boy she
secretly loves, but she cannot turn back into a human being. So the boy embarks
on an adventure to help Muge turn back into a human being.

The film was formerly scheduled to premiere
theatrically in Japan on June 5, 2020，but was cancelled due to COVID-19. Finally, it
was simultaneous premiered online on Xigua Video and Netflix instead.

According to a responsible person of Xigua
Video, as a platform available with a wealth of animation content, Xigua Video
previously introduced such works as “Fireworks”, “A Silent Voice” and “Tokyo
Godfathers”.  He added, Xigua Video will
continue to provide users with more diversified, better and longer video
content. In addition to animated films, the platform has been bringing in other
genres successively.

“Dracula”, one of BBC’s annual masterpieces,
streamed on Xigua Video and Netflix simultaneously on January 4, 2020. It was
also the first film streamed simultaneously on a Chinese video platform with
Netflix.

“Dracula” was produced by Hartswood Films,
co-presented by BBC One and Netflix and distributed globally by BBC Studios.
The production team came from the original crew who gave us “Sherlock”, the
acclaimed English series, including screenwriters Mark Gatiss and Steven Moffat
and producer Sue Vertue.

Phil Hardman, the senior vice president of
commercial strategy for BBC Studios Asia said, “We are honored to bring
this latest British masterpiece to the Chinese audience through Xigua Video. ‘Dracula’
gathers together the best actors and top creative teams in the industry. While
striving to enrich the character image, they also refine the storyline and
production, hoping to bring refreshing feelings to the audience. China’s online
video industry is developing rapidly. Its pace and scale have shocked the
world. Through partnerships with Xigua Video, we hope to reach a wider audience
and explore new cooperation models.”

In addition, Xigua Video has entered in-depth
partnerships with many well-known documentary manufacturers, such as BBC
Studios and Discovery, in the forms of co-production, content production and
copyright cooperation. “Primates”, a natural science documentary, was
exclusively available on Xigua Video and Toutiao on July 31. It is reported
that this is another high-quality popular science content co-produced by Xigua
Video and BBC Studios after “Hubble: The Wonders of Space Revealed”.

About Xigua Video

Xigua Video is one of China’s most popular
video-sharing platforms that enable users to discover, enjoy and share a wide
range of video stories, both short-form and long-form.

HONG KONG, CHINA – Media OutReach – 12 August
2020 – As unprecedented circumstances have swept the world in 2020 with the
curve-ball that COVID-19 turned out to be, every realm that we operate in has
had to navigate new norms, regulations, and strategies to survive the pandemic.
Businesses have especially been hit the hardest all over the world due to the
many new restrictions and consumer behaviours they have had to strategize
around.

Yet, astoundingly, the lifestyle segment
of the consumer goods market has seen a rapid spurt in demand worldwide – with
many e-commerce retailers thriving during, and even after COVID-19 times.

Flower Chimp – a leading online gifting
retailer has been a remarkable example of this phenomenon amidst the pandemic.
Delivering fresh flower arrangements and more all across South East Asia since
2016, Flower Chimp set foot in Hong Kong in 2019 – making this year only its
second year of operations within the country. Despite this, the company saw a
steady increase in sales over the past year, but what they may have not
anticipated is the spike that they witnessed within a period of just 2 months
of COVID-19.

The company saw a spike of 121% in demand
from only March to May, 2020 – which only further grew, even as the pandemic
saw a shift in patterns over the coming months. “Lockdown restrictions such as
travel bans have forced people to stay in Hongkong, often away from their loved
ones – a situation that induced more frequent gift sending to express
sentiments across long distances”, a spokesperson of the company said.

Being one of the many companies that have sustained
and thrived through these trying times, the case of Flower
Chimp’s results presents the possibility of new, inspiring avenues
in the market for many to turn to and achieve resilience towards during these
trying times.

About Limitless Technology

Founded in 2016 by German entrepreneurs
Maximilian Lotz and Niklas Frassa, Limitless Technology is an eCommerce Holding
company active across Southeast Asia with flagship brands such as Flower Chimp
and CakeRush.

Specially catering to consumers in the
gifting and lifestyle e-commerce segment, the group strives to serve the
growing demand for gift delivery services across South East Asia with high
caliber technologies, services, and teams.