Quadrum Global Foreclosing on Oxford Capital’s Godfrey Hotel

Veteran Chicago hospitality investor John Rutledge looks on track to hand over another hotel to his lender after pulling some cash out through a refinancing.

An affiliate of Rutledge’s firm Oxford Capital and foreign investors who put nearly $24 million into his 221-room Godfrey Hotel hotel deal in the River North neighborhood are at risk of losing the property to New York-based lender Quadrum Global.

A foreclosure complaint filed Tuesday in the Circuit Court of Cook County reveals that Quadrum, the hotel’s senior lender, has moved to seize the property at 127 West Huron Street. The legal action follows a depletion of the hotel’s financial runway, marking a downturn for a property that a little more than two years ago was celebrated as a successfully refinanced asset in a difficult Chicago hotel market.

The litigation stems from a “cascading default” that accelerated in the final weeks of 2025. According to court documents, the Oxford ownership entity was bound by a loan agreement requiring a minimum interest reserve account of $2.5 million if the property’s debt service coverage ratio fell below certain thresholds.

When the reserve dipped below $1 million in December, the lender issued a formal “Replenishment Notice.” By the middle of last month, the reserve had hit $0, and a debt service payment of more than $572,000 went partially unpaid, leaving a delinquent balance of $124,160, Quadrum’s lawsuit said. This breach allowed the lender to accelerate the entire $63 million primary debt, effectively ending the owner’s control of the cash flow and moving the property toward a judicial sale.

But there’s a twist with the ownership: an arm of Quadrum that’s separate from the senior lender entity is also a joint venture investor alongside Rutledge in the property’s equity, as Quadrum is at several other Oxford-operated hotels in Chicago.

Oxford and Quadrum completed development of the Godfrey in 2014. The property’s original developer began construction before the Great Recession on what was meant to be a Staybridge Suites extended stay hotel, but the project stalled with the economic crash and the developer was ultimately hit with a foreclosure lawsuit. Oxford bought the defaulted construction loan and took control of the property in 2012, redesigning and rebranding it as the Godfrey.

Quadrum’s lending arm refinanced the property with a $63 million loan in 2023, replacing a previous debt of a little more than $47 million and likely allowing the landlords to pocket some of the excess proceeds.

But now, there’s $57 million that remains due on the senior loan while there’s a group of foreign investors who chipped $23.5 million into the property through the EB-5 visa program who stand to be wiped out.

The EB-5 program is a federal initiative that allows foreign nationals to obtain U.S. permanent residency — green cards — in exchange for investing substantial sums into a project that creates full-time jobs for American workers. For developers like Oxford, this capital is often attractive because it is significantly cheaper than standard mezzanine debt or equity.

However, the Godfrey investors now face the harsh reality of subordination, with the Quadrum senior lender set to be repaid first by any sale or refinancing that occurs. It’s unclear what the Godfrey property is worth today, but nearby North Side hotel sales have been trading at notable discounts from their previous purchase prices, in some cases impairing loans, including at a Gold Coast hotel that sold for $13 million last month.

The senior lender offered the EB-5 group a ten-day window in January to cure the default by paying the $124,000 delinquency and replenishing the $2.5 million reserve themselves to protect their position. The filing of the lawsuit this week indicates that the investors were either unable or unwilling to throw more capital into the project — they’ve collected interest on their loan for years, however, since at least 2017.

Despite the legal fire, Rutledge’s Oxford is signaling this may not be a hostile foreclosure. The firm has a history of deeds in lieu of foreclosure, where properties are handed back to lenders amicably to settle debts, and Oxford’s hospitality management arm has stayed on to operate the hotel. In 2024, Oxford handed four San Francisco hotels back to its lenders under similar market pressures, but remained the operator of the properties.

Echoes of South Loop Distress

The Godfrey’s troubles mirror a larger wave of EB-5 related litigation currently roiling the Chicago lodging industry.

Hotelier Su-Mei Yen is currently facing an even larger $187 million foreclosure in the South Loop initiated by lender ACORE, as well as three separate lawsuits brought by EB-5 investors who loaned nearly $50 million to the hotel project led by Yen and her daughter, Cassie Yen, including one filed last month.

They allege a “scheme” in which the Yens controlled both the borrower and the EB-5 lender entities, creating an inherent conflict of interest.

While one case involving the South Loop property was recently ordered to arbitration, it is scheduled to return to court for a status update this spring, while two others are still in the early stages of litigation in Cook County court.