The DoubleTree by Hilton Hotel Tarrytown, while fighting foreclosure on a $15.9 million bank debt, is also facing a threat to its franchise agreement.
Affiliates of Hilton Worldwide Holdings demanded $595,000 in profits and royalties by Nov. 18, according to an October default notice, and threatened possible suspension from the reservations system and termination of the franchise agreement.
The DoubleTree sued Hilton Nov. 20 in Westchester Supreme Court to stop enforcement of the default notice.
The hotel is required to pay Hilton 4% a month on gross room revenues and 3% to 5% royalties. But since March and the onset of the Covid-19 pandemic, the lawsuit states, occupancy rates have been at an all-time low and the DoubleTree has taken significant losses.
The hotel has been kept afloat by continuing to pay employees, utilities and daily operational costs, according to the complaint, “without which there will ultimately be no hotel for (Hilton) to recoup their royalty fees.”
The DoubleTree asked the court to declare the default notice legally defective, arguing that it was delivered incorrectly. But on Nov. 25, the DoubleTree withdrew the lawsuit, with no indication of where the dispute stands.
Meanwhile, a mortgage foreclosure lawsuit filed in October by CIBC, a subsidiary of Canadian Imperial Bank of Commerce, Toronto, is pending.
CIBC is demanding $15.9 million, sale of the property and appointment of a receiver to manage the business.
The DoubleTree franchise is owned by 455 Hospitality, according to court documents, composed of Paul Sirotkin, Alex Sirotkin, Tzvi “Teddy” Lichtschein, Eliezer Scheiner and Eliyahu Spitzer.
The hotel is represented by attorneys Andrew P. Schriever, Jordan Brooks and Troy D. Lipp of Cuddy & Feder, White Plains.
