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.
On July 25, 2025, U.S. District Judge Paul Engelmayer ruled that claims related to LuxUrban’s Q1 2024 financial statements failed to meet the standard for pleading fraud. As a result, the core financial fraud allegations were dismissed. The remaining claims are limited to whether certain hotel properties were accurately described as being under lease — a dispute that, while allowed to proceed, does not involve allegations of financial errors. Stanford University Legal Reporters.
The Lease That Never Was
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.
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.
