Troubled hotel chain boots CEO after three months

The new chief executive officer of the troubled Miami-based hotel chain, LuxUrban Hotels, is already out. 

Shanoop Kothari, who was promoted to CEO in March after founder Brian Ferdinand stepped down, was terminated Tuesday. Kothari was replaced by industry veteran Robert Arigo, who joined LuxUrban from M&R Hotel Management that same month as chief operating officer.

LuxUrban, which specializes in leasing rather than buying the hotel properties it operates, has been in freefall since the beginning of the year. An analysis from short seller Bleecker Street Capital in January — which warned of looming financial problems and ongoing lawsuits facing the firm — contributed to a precipitous drop in the hotel chain’s stock price.

Short sellers bet on a company’s stock price to fall, and some aim to accelerate that process by publishing negative reports.

LuxUrban’s problems were compounded by a $1.2 million fine from New York City in February for 70 allegedly illegal short-term rentals. In March, the hospitality company posted a nearly $41 million quarterly loss and announced an internal audit. On June 3, LuxUrban announced the formation of a special committee to salvage value for its shareholders.

To top it off, a subsidiary of Apple Hospitality REIT sued LuxUrban this month, alleging that it is squatting at Hotel 57 in Midtown East and owes $1.8 million in rent.

LuxUrban’s stock price edged up Tuesday to 23 cents a share, down 96 percent from the beginning of the year.

Read more

Commercial

New York

Struggling hotel chain overstays welcome at Hotel 57

Commercial

New York

NYC fines LuxUrban $1.2M for illegal short-term rentals

Commercial

New York

Pomerancs default on $23M loan for Lower East Side hotel