Classic hotel may skip Chapter 11 bankruptcy, go to liquidation | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

While some hotel chains are weathering the economic downturn and even flourishing, a number of smaller properties or specific chain locations have struggled to stay afloat and had to file for Chapter 11 bankruptcy.

The company behind hotels such as The Tuscany and Hotel 27 in New York City suddenly shut down operations in September 2025 and left guests with booked stays scrambling to find other accommodations at the last minute.

In November, short-term rental platform Sonder filed for Chapter 7 bankruptcy and liquidation after Marriott pulled out of a licensing agreement that was initially envisioned to last into the 2040s.

Some of the guests who booked apartments on what was presented to customers as an upscale version of Airbnb had to immediately vacate properties and in some cases, were even locked out of the apartments.

Hudson Hotel asks to restructure, landlord wants to go straight to liquidation

The historic hotel, built in 1928 by the daughter of financier J.P. Morgan, has been closed to short-term guests since 2020. The story around the historic Hudson Hotel in New York City just got a major update, however.

The current owner of the building asked a bankruptcy court in Delaware to not allow the hotel operators’ request to restructure and instead take the company straight into liquidation, Bloomberg Law reported.

The two companies behind the hotel — CSC Hudson founded by Alberto Smeke Saba and Salomon Smeke Saba and an affiliate — had filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware in October 2025, according to Law360.

As first reported by Bloomberg, the landlord renting them space claims that the bankruptcy motion was filed in bad faith in order to avoid financial deadlines on its five-year plan to convert the hotel into 441 affordable apartments.

Development firm CSC Coliving purchased the hotel in 2022 for $207 million, but construction ran into multiple delays, reported W42ST. Tenants who lived in the hotel reported partially demolished walls, water stains, and a constant state of unfinished repairs.

A 2023 New York Department of Buildings report cited by W42ST described “extensive interior demolition, metal framing, and drywall partition work beyond [the] scope of approved plans.”

The Hudson Hotel was a historic hotel near New York City’s Columbus Circle.

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Endless construction and an argument over rent plagues the former Hudson Hotel

In the bankruptcy filing, Hudson operators claim ask to restructure the lease by arguing that they were only obligated to pay return on investment once the apartments started bringing in money rather than market-value rent.

“This complaint seeks recharacterization of the purported ground lease, which, while disguised as a ‘lease,’ does not resemble a ground lease, and certainly not the economic realities of a true lease by any definition of that term,” the complaint reads.

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Meanwhile, in a motion unsealed on Dec. 26, the company renting the hotel the space argued that the hotel operators were behind on rent owed by agreement. The company also indicated that the stalled construction was causing an additional money drain with no prospect of eventually reaching profit.

A separate lawsuit related to the former hotel, described by Law360 and brought forward by the escrow agent, also asks a court to resolve a dispute regarding who own the rights to the $1.6 million in tied-up funds.