Bankruptcy petition against First Hotels

Controversy hits First Hotel Østerport in Copenhagen

The second biggest hotel chain in Denmark, First Hotels, has not been paying rent to the owners of the First Hotel Østerport in Copenhagen for four months. The owners now want First to declare bankruptcy and have asked the bailiff to put First out of the hotel. The case concerns about DKK 200 million (€27 million).
In an unusual move, the limited partnership behind the Hotel Østerport has just filed for bankruptcy against the Norwegian chain First Hotels, which has 18 hotels in Denmark. The reason is lack of rent payments for the Hotel Østerport, which the Norwegian chain has operated for two years.
First Hotels thinks it is paying too much rent for several of the hotels it operates in Denmark. It has reportedly asked the owners of several of the properties to lower the rent. But there has been no new agreement with the owners of the 170-room Hotel Østerport.
“Last month we had a new round of negotiations with First,” Henrik Busch, Hotel Østerport’s chairman, told “Various options were on the table, for example rent reduction or the owners taking over operations until a new operator was found.”
But, according to Busch, nothing concrete came out of the April 18 meeting between the hotel owners and First.
“We have tried to do this nicely without having to go to war with First, but we have been held hostage in this case, and last week when the rent for this month did not come we filed a bankruptcy petition with our lawyers and to strike First off as the lessee of the hotel. The bailiff comes on June 18”, said Busch.
“In addition to the lack of rent from February to, preliminarily, May, we also have a claim of DKK 160 million to First for the rent they would have paid in their contract with us that expires in 2024. In addition, there is a contractual cost of approximately DKK 30 million in which First has to ensure that the hotel is in the same condition as when First moved in.”
[pictured: First Hotel Østerport]


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