Marriott files motion over Sonder 'attempted leverage'

NATIONAL REPORT – Messy details surrounding Sonder’s Chapter 7 bankruptcy case continue to emerge with Business Insider reporting that attorneys for Marriott International in an emergency court motion for relief from the automatic stay in the U.S. bankruptcy court filed on November 14 alleging the short-term rental company “attempted to leverage guest safety as a bargaining chip.”

Lawyers for Marriott allege that Sonder said that “unless Marriott financed its wind-down, it would shut down hotel systems and leave thousands of guests locked out of their rooms mid-stay, without regard to whether those rooms contained medication, passports, personal effects, or other essentials and without regard to whether those guests would be left with no place to sleep.”

The Marriott lawyers wrote in their motion, “As a result, Marriott had no choice but to terminate the agreement to facilitate communication with Sonder's guests, whose safety, security, and welfare would be impacted by Sonder's sudden liquidation.”

It has also come to light that in October Sonder was engaged with a third party – a prospective lender/purchaser – regarding a debtor-in-possession financing facility and a stalking horse purchase agreement for the sale of the company’s assets, according to R.W Baird’s Michael Bellisario. On November 2, Bellisario wrote, the prospective lender/purchaser indicated that it was withdrawing from negotiations.

Finally, Bloomberg has reported that Sonder’s Chapter 7 petition listed estimated assets and liabilities in the range of $1 billion to $10 billion each. Several entities under BlackRock, including BlackRock Global Allocation Fund and BlackRock Global Long/Short Credit Fund were listed as creditors.

BlackRock was also listed with 10% or more equity ownership in Sonder, according to the filing. Other shareholders include Senator Global Opportunity Master Fund LP, Atreides Foundation Master Fund LP and Polar Multi-strategy Master Fund.

At the same time, Sonder landlords and employees are chasing unpaid rents and wages. For example, in New York City, the owner of buildings in Chelsea and near Battery Park where Sonder leased space sued the company on November 11, alleging more than $10 million in damages from each property. Property owners in Miami Beach and Minneapolis have also sued Sonder over missing rents.