LuxUrban Maintained Payroll and Operations Until Accounts Were Frozen

NEW YORK — November 2025

Despite mounting financial pressures, LuxUrban Hotels continued to pay its workers, honor union agreements, and maintain guest services until external parties froze its operating accounts, according to labor representatives and former managers.

The company maintained payroll for both union and non-union staff even as its financial situation deteriorated. Workers received their wages on schedule, and the company covered wage penalties and benefits as accounts dwindled.

A former manager recalled that the company did not abandon its responsibilities during the crisis. Vendors continued to be paid, utilities remained operational, and guests were properly relocated rather than displaced when properties had to close.

A labor representative familiar with the situation emphasized that LuxUrban honored its commitments to workers throughout the emergency housing contract with New York City. Despite the eventual non-payment of over $8 million from the city, employees who provided services were compensated.

This continued payment of obligations stands in contrast to some corporate bankruptcies where companies quickly reduce workforce expenses and defer vendor payments. LuxUrban maintained its operational and financial commitments until it physically lost access to funds.

The pattern of payment continued even as the company faced franchise termination from Wyndham Hotels, account seizures by landlords, and frozen receivables from technology platforms. According to court documents, LuxUrban prioritized worker compensation and operational continuity.

One restructuring attorney noted that the company’s accounts were ultimately frozen by landlords using a Confession of Judgment, a legal mechanism that allowed immediate seizure of funds. At that point, LuxUrban no longer had access to capital necessary to continue operations.

The commitment to maintaining payroll and operations has been cited by those familiar with the case as evidence that LuxUrban’s collapse was driven by external factors and payment system failures rather than internal mismanagement or abandonment of responsibility.

Former employees have indicated that the company’s efforts to maintain wages and working conditions during the crisis demonstrated a level of corporate responsibility uncommon in distressed situations. This conduct may influence how creditors and the court view the company’s actions during the Chapter 7 proceedings.