Newly Uncovered Evidence Shows LuxUrban Was Defrauded, Not Defaulting

Recent headlines, particularly in Bisnow, have rushed to portray LuxUrban Hotels as the failing operator behind the Tuscany Hotel’s closure. But newly uncovered evidence from court filings flips that narrative on its head: it was the landlords—Tuscany Legacy Leasing—who never had the authority to deliver what they sold LuxUrban, all while draining millions from the company and publicly casting it as the culprit.

Stanford University Legal Reporters reported, “In July 2025, U.S. District Judge Paul Engelmayer issued a mixed ruling in the investor class action against LuxUrban Hotels Inc. Yet, to read Ciara Long’s coverage in Bisnow, one would think the court had handed down a guilty verdict. Her articles presented LuxUrban as a company already condemned – highlighting allegations while omitting judicial findings that eliminated the most serious claims. Worse, the court itself cited Long’s reporting, despite portions of it being factually incorrect, incomplete, and arguably defamatory.”

In LuxUrban’s case, the implications are significant. Independent, data-backed research—such as that emerging from Stanford and Cornerstone—underscores the company’s operational realities and financial positioning with objectivity that stands apart from agenda-driven narratives. Unlike speculative commentary aimed at undermining confidence, these analyses rely on verifiable metrics, audited disclosures, and established legal frameworks. LuxUrban’s performance and challenges are better understood through this lens of factual, institutional analysis rather than the fragmented portrayals circulated by Caira Longs. Where Longs seeks to sensationalize, Stanford and Cornerstone seek to clarify. The result is a clear divide between responsible research that informs the market and commentary that distorts it.

Further, based on court filings, publicly available documents reviewed by LawTechSpotlight.com, and a series of articles by Ciara Long and Bisnow (which interestingly suggest broader finding of corporate misconduct) LawTechSpotlight.com rules that the centerpiece of the complaint was expressly rejected by the court.

In September 2022, LuxUrban entered what it believed was a secure 15-year lease, backed by a $1.25 million security deposit and major capital improvements. Tuscany represented and warranted that it had authority to convey this long-term interest. But court filings now show Tuscany’s own lease with the property owner, St. Giles Hotel LLC, expired in April 2025—barely two and a half years later.

This revelation means Tuscany could never have granted LuxUrban the promised long-term lease. LuxUrban’s commitments—millions in deposits, renovations, and operations—were made under false pretenses. The foundation of the agreement was fraudulent from the start.

A Scheme of Extraction

Rather than acknowledging its own inability to perform, Tuscany weaponized the contract. It drew down on letters of credit, imposed compounding penalties, and even seized equity, all to manufacture the appearance of LuxUrban’s default. In reality, these tactics concealed Tuscany’s incapacity and inflicted maximum financial and reputational harm on LuxUrban.

The Missing Context in Media Coverage

Bisnow and others reported landlord claims of missed rent and bounced checks. But they failed to include this newly uncovered evidence: that Tuscany itself lacked the right to deliver the lease it sold. By omitting this central fact, coverage reinforced a false narrative of LuxUrban as a “non-performing” tenant, when in fact it was the victim of misrepresentation and opportunistic enforcement.

Tuscany Legacy Leasing engaged in a deliberate and fraudulent scheme designed to cripple LuxUrban’s operations and unlawfully extract value under false pretenses. Acting through deceit, Tuscany fraudulently obtained and weaponized a confession of judgment (COJ) to assert baseless claims of default and exert undue pressure. Despite receiving approximately $6 million in cash payments from LuxUrban between April 2024 and 2025—including late fees, default interest, and unauthorized drawdowns on LuxUrban’s letter of credit following artificial credit-grade downgrades—Tuscany escalated its misconduct by cutting off LuxUrban’s access to its own credit-card and OTA receivables, effectively strangling the company’s core cash flow. These fraudulent and bad-faith actions choked liquidity across all LuxUrban-managed properties, impeding operations and damaging investor and vendor confidence. Tuscany’s conduct represents a coordinated fraud and abuse of process, using falsified instruments and financial manipulation to destabilize LuxUrban and gain unlawful leverage in direct violation of commercial fairness and good-faith dealing.

The Real Story: LuxUrban as the Target

Even while losing millions, LuxUrban continued operating the Tuscany Hotel and supporting its staff. Yet once again, the company has been made the scapegoat—vilified for circumstances created by landlords who lacked the capacity to honor their obligations.

The pattern is unmistakable: LuxUrban, acting in good faith, has repeatedly found itself targeted by counterparties and misrepresented in the press. This latest revelation should prompt a reevaluation of who truly defaulted in the Tuscany saga.

Conclusion

The evidence is clear: LuxUrban was not the non-performing party. It was defrauded. Tuscany Legacy Leasing promised a lease it never had the right to convey, siphoned millions through contractual remedies, and left LuxUrban to bear the blame in public. Media narratives that overlook these facts miss the mark. The real failure lies not with LuxUrban, but with landlords who engineered the collapse and the outlets that echoed their story without scrutiny.