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Published on:

8 January 2024

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on Hospitality Dispute Resolution.

Hotel Dispute Lawyer: Choice of law to govern hospitality contracts — New York, Florida, Texas, California and Maryland law

Hospitality Litigation, Arbitration & Dispute Resolution

by

Mark S. Adams, Hotel Dispute Lawyer
Partner & Senior Member
JMBM’s Global Hospitality Group®

Mark S. Adams is an experienced trial lawyer, partner, and senior member of JMBM’s Global Hospitality Group®. In his more than 14 years with the Firm, Mark has created an international reputation as a Hotel Dispute Lawyer, handling litigation, arbitration and alternate dispute resolution in hundreds of matters affecting hotels, resorts, restaurants and other hospitality properties.

Why New York law is the governing law in so many hospitality agreements

There are many reasons why parties select the laws of a specific state to govern the interpretation and enforcement of contracts in the hospitality industry. Often, they select the laws of the state where the relevant hospitality property is located, or the laws where one or both of the parties reside. However, irrespective of those considerations, New York law is often chosen as the governing law for significant financial transactions and arrangements.

There are a number of factors that make New York law one of the most popular choices for governing law. These include the following:

  1. New York is a global financial and commercial hub, which logistically makes it a preferred jurisdiction for resolving disputes through negotiations, arbitration or litigation.
  2. New York has a well-established, highly respected legal structure that provides a level of predictability and stability crucial for dealing with complex contractual relationships within the hospitality industry.
  3. New York courts have established a robust and sophisticated body of case law. This provides clarity for parties entering into hotel contracts, offering guidance on various issues, including contractual interpretation, performance obligations, and potential liability. This well-defined legal landscape reduces uncertainty and potential disputes, fostering a more secure environment for hotel owners, management companies, and franchisees.
  4. The prominence of New York law in hotel contracts is linked to the state’s role as a key center for international business transactions. Many hotel management and franchise agreements involve parties from different jurisdictions, and the familiarity and enforceability of New York law on a global scale make it a practical choice. This preference for New York law enhances the efficiency of negotiations and facilitates cooperation in the performance of the contractual obligations.

American and International jurisprudence is based largely on legal precedents, which are real life cases with well-reasoned opinions as to the outcomes.  In light of my observations given above, New York has had both a longer tenure to establish legal precedents, generally, and particularly a greater volume of decided hotel cases. These legal precedents provide indispensable guidance on the potential or likely outcomes in pending disputes, i.e. greater predictability and certainty of outcome. CONTINUE READING →

Published on:

6 January 2024

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on Hospitality Dispute Resolution.

Meet Mark S. Adams, Hotel Dispute Lawyer –
Hospitality Litigation, Arbitration & Dispute Resolution

Mark S. Adams is an experienced trial lawyer, partner, and senior member of JMBM’s Global Hospitality Group®. In his more than 14 years with the Firm, Mark has created an international reputation as a Hotel Dispute Lawyer, handling litigation, arbitration, and alternate dispute resolution in hundreds of matters affecting hotels, resorts, restaurants, and other hospitality properties.

We caught up with Mark for some candid insights about him and his practice.

Q: Mark, you have had an amazing litigation career. What is the secret of your success?

A: I rarely lose, and that’s because I have a fantastic support team, unrivaled in talent. We also believe in and practice the Global Hospitality Group® mantra of “aggressive and passionate advocacy.”

Q: That is a good summary, particularly with your track record. But what is the philosophy or approach that leads to such success?

A: I customize my strategy and approach with each client in each situation. First, I need to understand my client, their goals, and other concerns. Then we initiate an iterative process where the client and I explore all relevant facts affecting the matter, what laws and contracts may govern, the aggressiveness of the parties, and various options for proceeding.  Numerous factors affect our choices, including timing for resolution, funding available to the paying party to accomplish a resolution and creative non-monetary solutions. There is no successful cookie-cutter approach.

Q: Controlling litigation costs is important for clients. If a client cannot avoid litigation, what do you do to work with the client to control the costs of pursuing or defending a claim?

A: The cost of litigation is important to all our clients, whether it is a relatively minor matter or a “bet the company” case. The cost-benefit analysis may vary depending upon the circumstances.

Here is how I advise clients to control litigation costs: CONTINUE READING →

Published on:

23 March 2023

See how JMBM’s Global Hospitality Group® can help you.

The Meet the Money program is now available on MeetTheMoney.com – take a look and see who’s speaking and what topics they’ll be exploring.

Meet the Money speakers don’t just come to the conference to share their perspectives; they also come to network with attendees. You can develop relationships, explore partnerships and ask questions one-on-one with our expert panelists and presenters, setting up opportunities that will take you through 2023 and beyond.

This year’s program will include:

  • Investment boot camps covering distressed properties and the renewed opportunity of EB-5
  • Special presentations interpreting the latest data and industry sector highlights
  • Discussion panels featuring insight into acquisitions and repositioning, creative financing, hotel transactions, alternative hospitality, lifestyle and boutique concepts and more

CONTINUE READING →

Published on:

23 January 2023

See how JMBM’s Global Hospitality Group® can help you.

The Global Hospitality Group® of Jeffer Mangels Butler & Mitchell LLP (JMBM) is pleased to announce publication of the 5th edition of The HMA & Franchise Agreement Handbook, a guide for hotel owners, developers, investors and operators considering a hotel management agreement (HMA) or franchise agreement, or dealing with the challenges of termination of one.

Co-authored by JMBM’s Global Hospitality Group® Chairman, Jim Butler, senior Group member Robert E. Braun and Mark S. Adams, the 5th edition of The Handbook includes an updated section on why long-term management and franchise agreements may now be terminable, with all-new material exploring historic changes to Maryland law that may affect these contracts on hotels across the country.

The new edition features commentary from two faculty members at Cornell University’s Nolan School of Hotel Administration; an overview by Chekitan S. Dev, the Singapore Tourism Distinguished Professor, and a Foreword by Jan A. deRoos, HVS Professor of Hotel Finance and Real Estate Emeritus. “The authors’ objective of providing the keys for ‘breaking the code’ to HMAs and franchise agreements is fully realized,” writes deRoos. “The work is revised and updated with an understanding that the great questions never change, but the answers do.” CONTINUE READING →

Published on:

29 April 2022

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on EB-5 Financing and here for alternative C-PACE Financing.

JMBM’s Global Hospitality Group® and EB-5 Finance Group™ are pleased to publish an updated edition of The Developer’s EB-5 Handbook for Construction Financing. This new and improved handbook provides essential resources for developers considering EB-5 financing for their next project.

The recent EB-5 Reform and Integrity Act of 2022 and the reauthorization of the Regional Center Program, a crucial part of EB-5’s success, has generated renewed interest in the program’s low-cost funding opportunities. The Global Hospitality Group® has developed an approach to guide clients through the current EB-5 process with a minimal amount of financial risk and execute financing with a high degree of confidence.

The Developer’s EB-5 Handbook for Construction Financing helps developers assess potential opportunities for EB-5 financing while avoiding potential traps for the unwary.

The Handbook includes articles addressing the following topics:

  • What EB-5 is all about? What are its essentials?
  • What’s different about EB-5 this time around?
  • Is EB-5 still viable for developers now that it’s been reauthorized?
  • What is the optimum EB-5 construction financing structure for development projects?
  • How much? How cheap? How certain? How long?
  • What are the most common mistakes developers make with EB-5 financing?
  • Who do I need on my EB-5 financing team?

To download a free copy of The Developer’s EB-5 Handbook, click here.

If you would like to discuss any of the issues presented in the Handbook, please contact us. CONTINUE READING →

Published on:

25 April 2022

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on EB-5 Financing.

Part two of our recent article in Westlaw Today explores the opportunities available to developers and investors now that the EB-5 program is back on track. For part 1, click here.

This article was originally published on Westlaw Today on April 14, 2022.

 

What the 2022 Revitalization of EB-5 Financing Means
for Real Estate Developers and Other Entrepreneurs: Part 2

What are foreign investors looking for?

Experts expect to see a flood of interest in the EB-5 program, both from foreign investors anxious to immigrate to the US, and from real estate developers with shovel-ready projects seeking capital.

There is no limitation in the law as to the type of project that can be funded with EB-5 financing. The critical requirement is that the minimum number of 10 new US jobs for each investor will be created within a specified period of time.

In the past, up to 70 or 80 percent of all EB-5 investors selected real estate-related investments, particularly those that create a large number of new US jobs such as hotels, restaurants, night clubs, resorts, hospitals, and senior living. Alternate energy projects and a host of other new businesses, however, could tap this financing source as the program comes back online.

Under the new law, it appears that retail and office projects may also be feasible, because new jobs created by tenants of a project appear to satisfy the job creation requirement. Previously, the law excluded jobs created through “tenant occupancy.” CONTINUE READING →

Published on:

18 April 2022

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on EB-5 Financing.

Since the renewal of the EB-5 program this year, there has been a lot of talk about what this means for developers interested in taking on new projects. Our recent article in Westlaw Today sums up the latest information about the program. Part one is below; part two will be published next week.

This article was originally published on Westlaw Today on April 14, 2022.

 

What the 2022 Revitalization of EB-5 Financing Means
for Real Estate Developers and Other Entrepreneurs: Part 1

After being sidelined for the last few years by circumstances culminating with the pandemic and the lapse of the Regional Center Program in June of 2021, the EB-5 foreign investment program looks like it has returned as a viable option for developers seeking low-cost funding for new construction projects.

On March 15, President Biden signed the Omnibus Spending Bill, which included the “EB-5 Reform and Integrity Act of 2022,” sponsored by Senators Pat Leahy (D-VT) and Chuck Grassley (R-IA). This bipartisan bill restores viability to EB-5 by reauthorizing the lapsed Regional Center Program, a component essential to the success of EB-5.

What is EB-5?

EB-5 refers to a program that is authorized by Section 203(b)(5) of the Immigration and Nationality Act. EB-5 is the fifth “Employment-Based” immigration program set forth in Section 203 and provides expedited visa processing for foreign investors making a minimum required investment in a project that directly creates at least 10 new jobs in the United States.

In short, it is both an immigration program for foreign investor immigrants, and a program that requires substantial capital investment in new business enterprises creating jobs in the United States.

The character of available financing and the projects most desirable for EB-5 investment are directly influenced by program requirements that must be met to qualify investors for a green card. For example, lower program investment minimums ($800,000 vs. $1,050,000) make projects more desirable in targeted areas of high unemployment and rural areas. CONTINUE READING →

Published on:

31 March 2022
See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on EB-5 Financing, and here for C-PACE Financing.

The hotel development and financing world is buzzing with the news that the EB-5 program has been renewed, creating new opportunities for upcoming projects. My partner David Sudeck and I have written the short update below to help get you up to speed.

 

EB-5 Reform and Integrity Act of 2022
EB-5 is revitalized and renewed

by Jim Butler & David Sudeck

In case you haven’t heard, EB-5 is back! On March 15, President Biden signed the Omnibus Spending Bill, which included the “EB-5 Reform and Integrity Act of 2022,” sponsored by Senators Pat Leahy (D-VT) and Chuck Grassley (R-IA). This bipartisan bill restores viability to EB-5 by reauthorizing the lapsed Regional Center Program, a component essential to the success of EB-5.

What’s different about EB-5 this time around?

While the basics of the program remain the same–foreign investors provide a specified amount of capital to development projects that create American jobs, and are put on a fast track to green cards for themselves and their families–some aspects of the Regional Center Program have changed. The Regional Center Program, which was authorized until June 2021, allows investors to pool their resources to finance new projects and enterprises. Regional centers also have different requirements for the types of jobs created by a development project.

The new bill raises the minimum investment in qualified projects to $1,050,000, except in Targeted Employment Areas (TEAs) where the investment minimum will be $800,000. TEAs are areas that the program prioritizes for job creation, usually rural or areas with high unemployment–where the investment minimum remains $800,000. The new minimum investment requirement will hold for the next five years, and then will be subject to reevaluation. The bill also puts a premium on investment in rural areas by expediting visa applications for investors involved in those projects; ten percent of EB-5 visas are set aside for these investors. Infrastructure projects are also subject to lower minimum investment requirements, but do not qualify for expedited visa processing. CONTINUE READING →

Published on:

18 January 2022

See how JMBM’s Global Hospitality Group® can help you.

“Practice Group of the Year” awarded to
JMBM’s Global Hospitality Group
by Law360

Jeffer Mangels Butler & Mitchell LLP (JMBM) is proud to announce that the Global Hospitality Group® (GHG) has been selected as one of Law360’s Practice Groups of the Year. This award “honors the practices behind the litigation wins and major deals that resonated throughout the legal industry in 2021” and winners are chosen out of hundreds of submissions. The recognition is a result of the unsurpassed experience of the GHG team members who, for the past 30 years, have helped clients with more than 4,500 hospitality properties, valued at more than $112 billion.

Some notable accomplishments by members of the GHG in 2021 include:

  • Workout, recapitalization, and repositioning of a $1 billion mixed-use lifestyle hotel project
  • Sale of an NYSE-traded hotel REIT’s entire portfolio of 15 upscale, select-service hotels for $305 million
  • Closing more than $210 million in Commercial Property Assessed Clean Energy loans (C-PACE)
  • Assisting clients with hotel management and franchise agreements for properties worth more than $1.5 billion
  • Serving as primary counsel for lenders on more than $2.2 billion in the distressed hotel, retail, and office loans during the global pandemic, including over $500 million for a single client

CONTINUE READING →

Published on:

10 December 2020
Click to see our category-killer experience with hotels. See also our distressed loan credentials and The Lenders Handbook for Troubled Hotels. And click here for the latest blog articles on loan modifications, workouts, bankruptcies and receiverships, and outlooks and trends.

Most of the receiverships in the United States are state court receiverships. But lenders seeking the relief and protection of receiverships are giving new consideration to filing in federal court.
Our partner Nick De Lancie took the lead in putting together this summary of some key factors in making this choice today.

Time for a new look at
Federal vs. State Receiverships

Many state courts are closed or backlogged

Due to the Covid-19 crisis, getting receivers appointed in many state courts may be difficult. Some state courts are effectively closed, others are backlogged, and still others have temporary restrictions on receivership or foreclosures proceedings that push receivership applications even further down the stack.

Federal courts are generally open and working. Federal courts, however, have generally been proceeding with their cases in a more-or-less normal fashion. Even though federal courts do not have the quick receivership hearings that some states permit in ordinary times, federal receiverships, which are not commonly used by secured creditors, can be a very useful remedy for defaulted loans. This is particularly true even when state courts are fully “open for business” where the borrower’s operations and the creditor’s collateral are located in multiple states.

Similarities to state receiverships. Federal receiverships are similar to traditional state court receiverships but they have nationwide scope and may avoid many of the problems that arise from seeking and using multiple receivers, each from a court in a different state. They are historically recognized by federal law and are recognized and governed by the Federal Rules of Civil Procedure. CONTINUE READING →

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