To help lenders avoid unnecessary pitfalls, we asked Guy Maisnik, one of the senior member of our real estate department and Global Hospitality Group® to help us review the essential principles that every lender should know. Guy is one of members of our deep bench who has been through every real estate downturn since the 1980s, and is used to helping lenders and investors maximize the value on billion dollar portfolios or one-off assets.

In Guy's career, he has worked with lenders to advise on the restructuring and exercising of remedies. These clients include numerous banks, special services, opportunity funds and pension funds on the structuring and/or exercise of their remedies, such as GE Capital, Midland Loan Services, Helios AMC, HSH Nordbank, AG, HSBC, Wells Fargo Bank, BankAmerica, Morgan Stanley, Sumitomo Mitsui Bank, Colony Advisors, Loan Star, Archon Capital, CalPERS and Washington PERS. Such work involved analyzing and assisting in the successful bidding and purchase of loan/asset portfolios, from small portfolios to those exceeding a billion dollars, exercising remedies on the acquired loans, addressing complex workout and guaranties realization issues, addressing tranche disputes, restructuring capital requirements, structuring sales of the acquired loans/assets and addressing tax consequences of note holders to facilitate workout and disposition strategies.

Here is what he has to say. You may also find the rich library of materials on www.HotelLawBlog.com a valuable source of information on this and related subjects. At the top of the blog, check out the tab that says "Hotel Law Topic" and click on the one called "Workouts, Bankruptcies and Receiverships."

Hotel Lawyers with grim reports from the field. If lenders are looking for some encouraging news on their distressed hotel asset sales prospects, they are not going to get it anytime soon. That is what the Atlas 2009 Year End Hotel Survey shows, but it does offer some valuable tips for dealing with continued distress in 2010.

Here is an executive summary.

"Realism" was the defining word for the ALIS conference held in San Diego on January 25-27, 2010. ALIS attendance was roughly half or less of last year, and the experts officially declared 2009 one of the worst years for the hospitality industry. They have already thrown in the towel on the industry for 2010, and look to an anemic 2011, with double digit growth in RevPAR after that . . . but we are so far down the hole now, that even double digit RevPAR growth will take years to reclaim the levels enjoyed in 2005-2007.

So what does this portend for lenders? And what is the smart money doing now?

In early November, we warned the readers of the Hotel Law Blog that the multi-year fight over "lost" transient occupancy taxes (TOT) that has been raging between local governmental entities (state, city, and county) and the various online travel companies (OTCs), such as Travelocity, Orbitz, Hotels.com, Priceline.com, and Expedia, was reaching the point where it was going to start impacting hotels financially. Unfortunately, we are there NOW, and things don't look good for the lodging industry!

Two important developments have just occurred recently, which hotel owners and operators need to watch carefully because they will be spreading rapidly.

First, at least one city has amended its TOT ordinance to expressly make hotels liable for the collection and payment of the TOT on the entire amount that a guest ultimately pays an OTC for the use of a guest room.

Second, some cities are amending their TOT ordinances so that it will make it more difficult and expensive for hotels to challenge TOT assessments.

Even if you don't have a hotel in Manhattan, you will want to know about the "Manhattan Hotels ADA Compliance Review Survey" conducted by the U.S. Department of Justice (DOJ). The DOJ's reach is nationwide and other cities are targeted for the same kind of survey and enforcement.

In an interview on the Hotel Law Blog earlier this year, Coming to a Theater District Near You: The DOJ's ADA "Survey," my partner, Marty Orlick, described the sweeping scope of the DOJ's ADA Compliance Review Survey of Manhattan hotels. In that interview, Marty emphasized that hoteliers who receive the questionnaire should be aware that DOJ investigators may have already been to their hotel -- in fact, the DOJ's sub rosa investigation may be why the hotel received the survey in the first place.

In today's interview on the same topic, Marty explains what hotel owners and managers should do when they receive the DOJ's ADA Compliance Review questionnaire in the mail. (First: take it very, very seriously.)

On November 3, Florida filed one of the first lawsuits against Expedia and Orbitz for lost bed taxes, but using the Florida Deceptive and Unfair Trade Practices Act.

Although October was a big month in the OTC battles, November may be even bigger. Today, we are going to look at the latest litigation filings and what they mean.

How Expedia, Orbitz, Travelocity and other online travel companies (OTCs) create huge headaches for owners and operators on their suits over hotel occupancy taxes.

Billions of dollars of hotel rooms have been sold through the online travel companies or OTCs. Generally speaking, no transient occupancy taxes (TOT) or bed taxes, have been paid on the portion of these sales kept by the OTCs when they resell the rooms to hotel guests. The exposure on these unpaid hotel bed taxes easily exceeds $100 million -- before interest and penalties.

Until now, most of the press has focused on the lawsuits brought by more than 200 local governments against Expedia, Orbitz, Travelocity and the other third party internet hotel booking companies. As many of these lawsuits now reach final resolution, some cities have announced that if they don't win against the OTCs, they will take aggressive action to collect these lost bed taxes from the hotels themselves. And OTCs have said that if they lose, they may come back against the hotels.

Who will be the biggest loser in this high-stakes poker game, and how did we get here? If you think you already know that, then skip to end of this article to see if you also have a firm grip on the "5 things every hotel owner and operator needs to know."

This is one of many articles on the subject of "troubled hotel loans - workouts, bankruptcies & receiverships" in the rich library at www.HotelLawBlog.com.

Our national hotel practice focuses on being the legal and business advisors for lenders, borrowers and investors. With the hotel industry suffering a record-breaking collapse of revenues and no immediate relief in sight, everyone is starting to examine available options.

ADA Lawyer update. Worried about ADA claims? If not, you should be! There is a flood of private claims driven by evangelistic "true believers" and blackmail artists. The real tsunami is still coming. The government itself is initiating nationwide enforcement "sweeps" against hotels, and the California Supreme Court is making it more profitable and easier than ever to file ADA claims.

What can YOU do? Finally, there is something you can do to shield yourself against this ADA litigation threat in California. The CASp program is cost-effective and invaluable protection. Don't wait until it is too late!

Here is our take on what happened in Phoenix . . .

Hotel Lawyer insights on the new CMBS rules -- implications for troubled loans today.

On September 15, 2009, the United States Treasury changed the REMIC rules applicable to CMBS to give servicers greater flexibility to modify troubled commercial real estate loans. The changes are effective immediately and are implemented in final regulations under the tax code and a revenue procedure that is designed to provide guidance. In fact, the revenue procedure applies to loans modified after January 1, 2008. What does all this gobbledygook really mean?

Here's our take.

A recent opinion out of Florida involving a fatal ATV accident to a 14 year old at an ATV track could have a major impact on the validity of parental release forms. In the case of Kirton v. Fields, the Florida Supreme Court ruled that a pre-injury release signed by a parent is not valid against a minor who is injured while participating in a "commercial activity." While other courts have reached similar results, the Kirton case has attracted nationwide attention and may lead those other states that currently uphold parental release forms to change their law to follow Florida's lead.

This is one of many articles on the subject of "troubled hotel loans - workouts, bankruptcies & receiverships" in the rich library at www.HotelLawBlog.com.

Do the math yourself! Run a present value analysis of likely cash flows on 3 alternate scenarios. Decide whether you have the stamina and capital for a long haul if you intend to hold.

Owners and lenders of thousands of hotels in the United States and abroad are confronted with this decision. Here are a few thoughts from the pros.

This is one of many articles on the subject of "troubled hotel loans - workouts, bankruptcies & receiverships" in the rich library at www.HotelLawBlog.com.

Hotel Lawyer with some bad news for the luxury hotel segment.

From some reactions, you might think that the likely "End Of The Recession" by the end of 2009 means that the "Recovery" is close behind.

Unfortunately, what follows next will not feel much better for many for a very long time. Nowhere is that more true than in the luxury hotel segment, where Smith Travel Research foresees a 27% drop in RevPAR for 2009 followed by another 9% in 2010!

Here are a few of the most interesting slides from Smith Travel Research and other industry sources since August 20, 2009, focusing on the luxury hotel segment. How bad are things? How bad are they likely to get from here? Fasten your seat belt!

Hotel closings: Hotel Lawyer with another look at alternatives to closing that hotel.

We have gotten a lot of feedback on our recent article about the precipitous drop in value that accompanies a hotel closing, or as some say, when the hotel is "put in mothballs" or "goes dark". See Closing that hotel may be the worst money-saving idea you ever had! Lenders, here's why mothballing a hotel can be a very bad idea.

In that recent article, we talked about 8 bad things that happen when you close a hotel, and suggested that a hotel should never be closed without first running a careful analysis of cash flows and holding costs. That is not to say, a hotel should never be closed, but a hotel closing deserves close scrutiny, and full exploration of the alternatives.

Today, we will focus on one of those.