Hotel Receiverships + Whistleblowers + Property Taxes + Safety & Security Risks + Construction Delays, Repercussions

State of Play

Bankruptcies in the hotel industry haven’t been as prevalent as predicted at the beginning of the pandemic. The industry expected to see a tidal wave of bankruptcies due to the business impact from COVID-19, from stay at home orders and non-essential designations, to lack of leisure and business travel even as restrictions were lifted. Instead, there has been an uptick in receiverships, which are faster, cheaper and more flexible.

A receivership can:

Be a helpful tool for a lender to gain control of the property pending foreclosure, put in new management (if needed), address performance issues, and possibly sell through a court fiduciary.
Put pressure on a borrower to find new financing/come up with financial proposal to address delinquencies – "put their money where their mouth is."