The Law Offices of Frank R. Cruz announces that it has filed a class action lawsuit in the United States District Court for the Southern District of New York, captioned Pack v. LuxUrban Hotels Inc., et al., Case No. 24cv1030 , on behalf of persons and entities that purchased or otherwise acquired LuxUrban Hotels Inc. (“LuxUrban” or the “Company”) (NASDAQ: LUXH) securities between November 8, 2023 and February 2, 2024, inclusive (the “Class Period”). Plaintiff pursues claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).
Investors are hereby notified that they have until 60 days from this notice to move the Court to serve as lead plaintiff in this action.
If you are a shareholder who suffered a loss, click here to participate.
In November 2023, the Company announced it had signed a 25-year Master Lease Agreement (“MLA”) with the prestigious Royalton Hotel in New York.
On January 17, 2024, Bleecker Street Research 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 confirmed LuxUrban 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 “in the last six months 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 complaint filed in this class action 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: (1) that the Company had not signed a lease with the Royalton Hotel; (2) that, as a result, LuxUrban’s total reported units was overstated; (3) that LuxUrban faced multiple lawsuits for unpaid rent; and (4) that, 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 LuxUrban securities during the Class Period, you may move the Court no later than 60 days from this notice to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased LuxUrban securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 2121 Avenue of the Stars, Suite 800, Los Angeles, California 90067 at 310-914-5007, by email to info@frankcruzlaw.com, or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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