Case Summary

LuxUrban Hotels

NASDAQ: LUXH

Case Details

  • Pack v. LuxUrban Hotels Inc. et al.
  • Class Period:November 8, 2023 - February 2, 2024
  • Date Filed:February 12, 2024
  • Jurisdiction:U.S. District Court, Southern District of New York
  • Docket Number: 1:24-cv-01030
  • Lead Plaintiff Deadline: April 12, 2024
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Overview

A class action lawsuit has been filed against LuxUrban Hotels, Inc. (“LuxUrban” or the “Company”) (NASDAQ: LUXH) and certain of the Company’s current and former senior executive officers alleging violations of the Securities Exchange Act of 1934.  The LuxUrban lawsuit is brought on behalf of all persons and entities who purchased or otherwise acquired LuxUrban securities between November 8, 2023 and February 2, 2024, both dates inclusive (the “Class Period”), and investors have until April 12, 2024 to seek appointment as lead plaintiff of the LuxUrban class action lawsuit.

LuxUrban utilizes an asset light business model to lease hotels on a long-term basis and rent hotel rooms in the properties it leases.  The Company leases to business and vacation travelers through the Company’s online portal and third-party sales and distribution channels, including several worldwide online travel agency (OTA) channels.  The Company manages a portfolio of hotel rooms in New York, Washington, D.C., Miami Beach, New Orleans, and Los Angeles.  In November 2023, the Company announced it had signed a 25-year Master Lease Agreement (MLA) with the prestigious Royalton Hotel, a four-star hotel located at 44 West 44th Street, New York, New York.

On January 17, 2024, Bleeker Street Research (“BSR”) published a report, which alleged that the Company had not actually signed a lease with the Royalton Hotel.  The report stated the owner of the Royalton Hotel building had confirmed LuxUrban had never actually signed a lease, nor even provided a Letter of Credit.  The report also alleged the Company was embroiled in a number of lawsuits that allege LuxUrban failed to pay rent repeatedly, and that in the last six months it has been sued by landlords at four of their properties for unpaid rent, but that LuxUrban had never once disclosed the nature of these lawsuits.  On this news, the Company’s stock price fell $0.58, or 12% to close at $4.32 on January 17, 2024, on unusually heavy trading volume.  The stock price continued to fall an additional $0.42, or 10%, to close at $3.89 on January 18, 2024, on unusually heavy trading volume.

Then, on February 2, 2024, after the market closed, LuxUrban announced the termination of discussions to add the Royalton Hotel to its roster of properties and that it was withdrawing its prior statements regarding the Royalton, including prior quarterly reports which listed the Royalton under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Property Summary – Properties under lease, not operating.”  On this news, the Company’s stock price fell $0.99, or 22%, to close at $3.50 per share on February 5, 2024, on unusually heavy trading volume.

The lawsuit alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects.  Specifically, Defendants failed to disclose to investors that: (1) the Company had not signed a lease with the Royalton Hotel; (2) as a result, LuxUrban’s total reported units was overstated; (3) LuxUrban faced multiple lawsuits for unpaid rent; and (4) as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

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If you purchased or otherwise acquired LuxUrban (NASDAQ: LUXH) securities between November 8, 2023 and February 2, 2024, both dates inclusive, and suffered substantial losses, and you wish to serve as lead plaintiff in this lawsuit, we encourage you to submit your information to DiCello Levitt LLP via the form on this page. 

You can also contact DiCello Levitt partner Brian O’Mara by calling (888) 287-9005 or at investors@dicellolevitt.com. 

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