Court gives businesswoman Mary Wambui seven days to raise Sh100 million or lose Glee Hotel

The ruling offers Wambui a lifeline in a dispute with Equity Bank over an alleged Sh8.267 billion loan default that has placed the luxury hotel at risk of being sold to recover the debt.

The court directed that the Sh100 million be deposited within a week, failing which the temporary protection against the auction will lapse, paving the way for the lender to proceed with the sale of the hotel.

At the centre of the dispute is the Glee Hotel, a luxury hospitality facility located on Nairobi's Northern Bypass in Runda. The property, valued at about Sh9.5 billion, sits on eight acres and features 211 rooms and conference facilities.

Court documents indicate that efforts to settle the debt dispute outside court were unsuccessful. Wambui reportedly proposed settling the outstanding loan with a Sh5 billion payment, which the bank rejected. A subsequent offer of Sh7 billion also failed to secure an agreement, prompting the lender to initiate recovery proceedings.

In seeking to stop the auction, Wambui's lawyers argued that the bank should first exhaust remedies against the principal borrower before pursuing assets tied to guarantors.

“The bank ought to first pursue the principal borrower and exhaust the available securities before moving against a guarantor,” the legal team argued in court papers.

The lender, however, maintains that it is entitled to enforce its securities and guarantees following the borrower's default, insisting that the debt remains unpaid and recoverable under the terms of the lending arrangements.

The case has drawn attention within banking and legal circles because it raises questions about the extent to which lenders can proceed directly against guarantors when a borrower defaults.

In granting the interim orders, the court balanced the interests of both parties by preserving the property from immediate sale while requiring a substantial deposit as security.

“The applicant shall deposit Sh100 million within seven days, failing which the interim orders shall automatically lapse,” the court directed.

The matter will now proceed to a further hearing as the court considers the competing arguments over the recovery process and the enforcement of guarantees in the multi-billion-shilling dispute.