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CKR Law LLP Obtains TRO to Stop Chairman of XpresSpa From Wiping Out Shareholders’ Interests

On April 29, 2019, CKR Law LLP obtained a temporary restraining order in the Southern District of New York enjoining Bruce Bernstein from declaring the airport spa company, XpresSpa, in default of a $6.5 million credit facility secured by all of the company’s assets. Bruce Bernstein, the Chairman of the Board of Directors of XpresSpa Group, Inc., also controls Rockmore Investment Master Fund, Ltd, the entity which holds the senior secured note. There has been no payment default on the note and XpresSpa continues to pay interest at about 11.42% per year. XpresSpa had reported in its most recent 10-K that the noteholder was going to declare a default on a technicality in financial reporting covenants of the note. The Court enjoined Bernstein because he controlled both sides of the transaction and stood to benefit by the security interest the noteholder held over XpresSpa’s assets. Declaring a default on a technicality while XpresSpa continued to pay interest would have put Bernstein’s interest above those of the shareholders, who would have been wiped out.

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For more information on this ruling and its implication, please contact:

Michael J. Maloney - Mmaloney@ckrlaw.com

Rosanne E. Felicello - Rfelicello@ckrlaw.com

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