UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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| ITEM 8.01. | OTHER EVENTS. |
As previously discussed in the final prospectus for the initial public offering of LuxUrban Hotels Inc. (the “Company”), and in subsequent filings made under the Securities Exchange Act of 1934, as amended, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, prior to the Company’s focus on leasing entire hotel properties and renting the rooms therein to vacation and business travelers, the Company also engaged in the leasing of multi-family dwellings and renting apartments therein to travelers and others on a short-stay basis. As noted in prior filings, numerous municipalities, including the City of New York, have adopted laws and regulations limiting or prohibiting this latter business activity in prescribed residential areas. The adoption of these laws and regulations, together with the numerous favorable hotel lease acquisition opportunities the Company identified as a result of difficulties within the hotel industry resulting from the COVID-19 pandemic, served as the impetus for the shift in the Company’s focus to hotel properties. While the Company’s principal business and operations have not involved residential dwellings since the end of 2022, the Company did conduct short-stay rental operations in residential areas during the period prior to this business shift. As noted in the relevant filings with the Supreme Court of the State of New York, the Company voluntarily initiated contact with the City of New York regarding such operations and voluntarily came forward to resolve any liability arising under applicable laws and regulations. Indeed, the voluntary initiation by the Company of such resolution activity was an integral part of its shift away from residential properties to hotel properties with the objective of ensuring the shift was without trailing liabilities, and as part of this initiative, the Company reserved against projected liabilities in its financial statements.
On March 4, 2024, the City of New York filed a Voluntary Stipulation of Settlement (the “Settlement”) entered into by the City of New York and the Company in an action captioned The City Of New York v. Corphousing Group, Inc. f/k/a Corphousing LLC, and SoBeNY Partners, Inc. f/k/a SoBeNY Partners LLC (the “Action”). Under the terms of the Settlement, the Company is enjoined from future marketing, advertising or making available any rental properties for stay periods of 30 days or more in any properties that are subject to the short-stay prohibitions under applicable laws and regulations. The Settlement covers activity that ended in March 2022, and the Company has no intention in engaging in such business activity again. The Company agreed to an aggregate fine of $1,200,000 which shall be paid through an initial payment of $225,000 and six additional semi-annual payments of $162,500 through November 2026. These payments are less than the amounts reserved on the Company’s financial statements.
The Settlement shall become effective on the date (the “Effective Date”) that it is “so ordered” by the Supreme Court of the State of New York. The Settlement contains a release and waiver from the City of New York in favor of the Company, parents, subsidiaries, other affiliates, and all of their officers, directors, agents, employees, insurers and assigns with respect to any and all matters addressed in the Settlement that occurred or may have accrued up to the Effective Date (upon payment in full of the settlement amount).
The Stipulation of Settlement is furnished as Exhibit 99.1 to this Current Report on Form 8-K. Other information contained in or accessible through the Company’s website does not constitute part of, and is not incorporated into, this Current Report on Form 8-K.
| ITEM 9.01. | FINANCIAL STATEMENT AND EXHIBITS. |
(d) Exhibits:
| Exhibit No. | Description | |
| 99.1 | Stipulation of Settlement, dated March 4, 2024. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: March 7, 2024 | LUXURBAN HOTELS INC. | ||
| By: | /s/ Shanoop Kothari | ||
| Name: | Shanoop Kothari | ||
| Title: | Co-Chief Executive Officer and Acting Chief Financial Officer | ||
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