About Jim Butler


Featured Articles

Featured Articles

Hotel Lawyers -- featured subjects and articles
Meet the Money® 2014

ADA defense and compliance

EB-5 financing

Workouts, bankruptcies & receiverships

Hotel Management Agreements

Hotel Franchise & License Agreements

Hotel industry trends

This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer. Please contact me at Jim Butler at jbutler@jmbm.com or 310.201.3526.

Published on:

22 June 2020

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

Meet the Money® Online: Hotels and Information Security
Protecting Guests and the Bottom Line

Speakers from Manhattan Hospitality Advisors, Tiered Communication Services Inc. and Willis Towers Watson will join Bob Braun of JMBM’s Global Hospitality Group® for this informative online program.

Please join us this week, on Thursday, June 25, 2020, when Meet the Money® Online addresses an issue of critical importance to the hospitality industry: information security.

As privacy laws demand companies do more to protect customer and employee data – and cyber hackers become more sophisticated – making sure your hotel’s information is secure has never been more important.

This free webinar will take place on Thursday, June 25 at 10:30 AM PDT / 1:30 PM EDT. Register Now.

Join our panel of cybersecurity experts and hospitality veterans for a 1-hour webinar to discuss:

  • What personal information hotels collect and how they use it
  • The role of hotel owners, operators and brands in guest information
  • Technology aspects of information collection, use and protection
  • Insurance issues – how to mitigate risk and cost using insurance
  • Legal obligations and compliance

This discussion will be moderated by Robert E. Braun, partner and co-chair of the Cybersecurity and Privacy Group at Jeffer Mangels Butler & Mitchell LLP who works with companies on their data technology, privacy and security matters. Bob is also a senior member of JMBM’s Global Hospitality Group® and has more than 20 years of experience in representing hotel owners and developers in hotel management and franchise agreements, condo hotel securities issues and many transactional matters, including entity formation, financing, and joint ventures.

Our speakers include:

  • Jonathan Adam, Co-Founder and Chief Technology Officer, Tiered Communication Services, Inc.Jonathan Adam is a founding member and CTO of Tiered Communication Services, Inc. With 17 years of hotel experience, he pairs high end development projects with extremely secure advanced technology systems for an unsurpassed guest user experience, driving amazing rates of return to owners. He holds multiple technology patents, and co-founded the ySuite Incubator in Austin and PracTECHal Solutions headquartered in Las Vegas. The ySuite team owns and operates multiple hotels in the Austin area, and utilizing the TCS technology infrastructure, they generate significant amounts of high margin add-on revenue through new hospitality revenue channels.
  • Jack Westergom, Managing Director and Founder, Manhattan Hospitality AdvisorsJack Westergom is Managing Director and Founder of Manhattan Hospitality Advisors. Jack is a veteran hotelier whose background includes asset management, hotel/resort operations, international marketing, investment relations and real estate development including many of the top 25 hotels and resorts in the world. Manhattan Hospitality Advisors has provided oversight on over $18 billion of hospitality assets around the world and has helped hotels to successfully navigate through four real estate downturns.
  • Heather Wilkinson, SVP, FINEX E&O/Cyber, Wills Towers WatsonHeather Wilkinson is SVP in the FINEX Cyber & E&O practice for Willis Towers Watson with over fourteen years of experience in the cyber insurance industry. Heather is a founding member of the Willis Towers Watson E&O and Cyber Broker Team; she joined the organization in 2006 and has been instrumental in placing some of the largest towers of E&O and Cyber insurance placements in the world. She is uniquely qualified to handle Cyber and Professional Liability issues and placements and is based in Los Angeles.

There is no fee for this program.


Published on:

26 May 2020

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

Meet the Money® Online: State of the Hospitality Industry

More than 1,100 people registered for last week’s Meet the Money Online webinar, “The State of the Hospitality Industry”.

If you weren’t one of them and would like to watch the full hour-long webinar, you can find it here, on the Resource Center page of HotelLawyer.com.

Also on the Resource Center page you can find the thought-provoking presentations made by our expert panelists:

U.S. Hotel Overview
Vail Ross of Senior VP, Global Business Development & Marketing, STR presented noteworthy statistics on the state of the hotel industry and the impact that Covid-19 has had on construction.

U.S. Hotel Outlook: Navigating the Storm
Jamie Lane, Senior Director, Economics & Forecasting, CBRE, examines the economic outlook for the U.S. and what it means for lodging. His presentation includes assumptions, updated CBRE forecasts and differences in recovery timing by chain scale and markets.

State of the Hospitality Industry Today: Hotel Values and Cap Rates
Suzanne Mellen, Senior Managing Director, HVS, reviews how hotels are being valued in this uncertain economic environment and when hotel values will recover to pre-Covid levels.

U.S. Lodging Industry 2020. COVID-19: Shocking Unprecedented Downturn
Daniel Lesser, President & CEO, LW Hospitality Advisors, explores long term sector paradigm shifts and where the lodging industry will go after hitting rock bottom.

We missed gathering in person with all our industry friends for what would have marked the 30th year of Meet the Money® the national hotel investment and finance conference.  However, through Meet the Money Online and the Hotel Law Blog, we will continue to provide the industry with research, analysis and insight, and most importantly our take on “what it all means” as we move forward into economic recovery.


Published on:

19 May 2020


Click to see our category-killer experience with hotels, and click here for the latest articles on Labor & Employment.

Hotel Lawyer on opening our country back up — California update

As California lawmakers release new guidance on easing stay-at-home restrictions, many employers are wondering how they can safely begin to reopen their businesses. In their latest update, JMBM’s Labor & Employment Group discuss the four phases of reopening and what employers can expect as they implement new workplace requirements. – Jim

California Employers’ Road Map to Reopening the Physical Workplace
Marta Fernandez

In only two months, California employers have experienced an unprecedented disruption to business and the adoption and implementation of myriad new laws aimed at remedying the economic effects of COVID-19 and limiting its spread. But even now, as California lawmakers from the Governor to local mayors agree that it is time for California to get back to doing business, there is great uncertainty as to when and how this can safely occur.

The process will obviously be gradual and subject to reversal at any time.  Business operations will eventually return to full capacity, but the workplace will be different for months, if not years, to come as a result of new laws and the nature of the pandemic crisis itself.

When it comes to employee matters, how can an employer best develop a plan to navigate the uncertainty of emergency orders restricting operations, new laws and regulations, and an entirely new business environment?

We suggest that employers work with their professionals to implement their own four phase plan:

  1. Determine when your business can lawfully reopen and to what extent
  2. Assess how the timing of bringing employees back affects the risks and costs associated with reopening your business
  3. Identify any limitations on your discretion to choose which employees to bring back and when
  4. Understand new workplace requirements and create systems to implement them

Read the full alert here for a discussion of all four phases.

Online Resources


Published on:

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


Hotel Lawyer: Increasing Distressed Hotel Loans and Troubled Hotel Assets

Originally published in November 2008 on HotelLawBlog.com, then updated in 2010 for our Lenders Handbook for Troubled Hotels, we have updated this article through May 2020 to assist industry friends in dealing with distressed loans provoked by the COVID-19 crisis. 

How can a “special purpose entity” borrower ever file bankruptcy
if independent directors must approve the filing?
Jim Butler, Bob Kaplan, and Nick De Lancie

Since the mid-1990s, lenders on hotels and resorts have generally required their borrowers to transfer the asset being financed into a “single purpose” LLC or other “bankruptcy remote” entity sometimes respectively referred to as an “SPE” and “BRE.” The main feature of an SPE is that it owns only the single asset being mortgaged, is unlikely to become insolvent due to its own activities, and is generally protected from the effects of the insolvency of its affiliates. The main feature of a BRE is that filing bankruptcy is only a remote possibility because of various inherent or contractual legal requirements built into the very entity.

What is a bankruptcy remote entity? Why use one?

A BRE is an entity (usually an SPE) that has a structural layer of protection in its organic documents that makes it more difficult for the entity to seek bankruptcy protection. A number of approaches have been developed to create this “bankruptcy remote” structural layer.

Today, a BRE’s structural protection for the lender typically provides in its organic documents that in order to commence a bankruptcy case, approval must first be obtained from one or more independent directors or the equivalent, depending on the entity. Such a person must be independent of the borrower and is appointed by the lender, or approved by the lender. For simplicity, we will call such persons “independent directors.”

The lender expects that the independent director simply will not approve the entity’s commencement of any bankruptcy case. Thus, without a bankruptcy, the lender would be able to foreclose on the hotel or real estate without the delay and cost of bankruptcy.

Clashing fundamental principles – state corporate governance vs federal bankruptcy relief

At root, each BRE approach or strategy is based on the long-established, fundamental principle that, even though bankruptcy is a federal law matter, the entities in question are created under and governed by state law. Some believe that such corporations, limited liability companies, limited partnerships or other types of “corporate” entities can only be governed by the law of the state in which the corporate entity was organized. Therefore, the organic documents of the entity (adopted pursuant to that state’s law), govern who has the authority to decide that the entity will commence a bankruptcy case.

But this long-established principle of state law controlling corporate governance runs headlong into another long-established, fundamental principle of bankruptcy. The Bankruptcy Code (section 109(a)) expressly authorizes any “person” to file a bankruptcy petition. A person includes any corporation, limited liability company, and general or limited partnership. Waivers or attempts to contractually surrender this right are void as against public policy and, thus, unenforceable. CONTINUE READING →

Published on:

13 May 2020

Click here to see How JMBM’s Global Hospitality Group® can help you, here for the latest articles on the coronavirus and here for the latest materials on loan modifications, workouts, bankruptcies and receiverships.

COVID: First of kind Wisconsin Supreme Court decision strikes down state’s stay-at-home order by vote of 4 to 3

Wisconsin Governor Tony Evers issued his stay-at-home order for nonessential businesses on March 18. On April 16, he extended the order until May 26. Reports say that the governor declined to negotiate with legislators two weeks ago on a compromise to the terms of the restrictive order, preferring to see what the court decided.

It was a winner-take-all decision. This evening, that order was invalidated and the court refused the state’s request for a six-day stay to allow GOP lawmakers and the governors to work out new rules. As a result, all state restrictions are now removed on social gatherings or business.

After a 90-minute online video conference hearing before the Wisconsin Supreme Court last week, the court today issued a decision striking down the governor’s order.

The court ruled that the government exceeded the statutory authority granted during an emergency, characterizing the order as “confining all people to their homes, forbidding travel and closing businesses.”

Justice Rebecca Bradley was one of the concurring justices. During oral arguments last week, she asked the attorneys defending Andrea Palm, Wisconsin’s top health official the following question:

Isn’t it the very definition of tyranny for one person to order people to be imprisoned for going to work, among other ordinarily lawful activities?

The state argued that the legislature gave the health department officials such power, and said people will die if the court strikes down the order. CONTINUE READING →

Published on:

08 May 2020

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

Meet the Money® Online: State of the Hospitality Industry Today

Presentations from HVS, CBRE, STR and
LW Hospitality

While we may not be able to meet in person this year, Meet the Money® is still bringing you expert research, analysis and insight as the industry navigates this unprecedented time.

The webinar will take place on Wednesday, May 20 at 10:30 AM PDT / 1:30 PM EDT. Register now.

Join us for a 1-hour webinar with presentations from industry leaders exploring:

  • Where are we now?
  • How quickly can the industry recover?
  • What are the signs you should be looking for?

The webinar will be moderated by Jim Butler, a founding partner of JMBM and one of the top hotel lawyers in the world. Devoting 100% of his practice to hospitality, Jim is author of www.HotelLawBlog.com and chairman of the Global Hospitality Group® which focuses on representing hotel owners, developers, and lenders.

Our panelists include:

  • Suzanne R. Mellen, Senior Managing Director, HVS

    Suzanne R. Mellen has unparalleled experience, having appraised thousands of hotels, gaming assets, and related real estate throughout the world over the past 40 years. She specializes in complex hotel and casino feasibility issues.

  • Jamie Lane, Senior Research Director, CBRE Hotels Research

    Jamie Lane is the senior research director of Econometric Advisors and CBRE Hotels Research, leading economics, forecasting and data intelligence. Based in Atlanta, Jamie has more than 10 years of experience in economics and consulting. He manages CBRE’s team of economists and oversees forecasting and analysis for all property types. He specializes in forecasting of the hospitality industry.

  • Vail Ross, Senior Vice President, STR

    Vail Ross is responsible for the overall coordination, functional management and leadership of the business development and marketing strategies for STR. She is often featured as a guest speaker at international, national, regional and state conferences. Vail is the past chair for the AH&LA Women In Lodging (WIL) Executive Council and the HSMAI Foundation Board of Directors.

  • Daniel H. Lesser, President and CEO, LW Hospitality Advisors

    Daniel H. Lesser brings more than 30 years of expertise in a wide range of hospitality operational, investment counseling, valuation, advisory, and transactional services. He provides services to corporate, institutional, and individual clients as well as public agencies on all facets of hospitality real estate.

Register Now


Published on:

30 April 2020

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

Note: If you are an individual consumer with coronavirus-related travel issues, please do NOT contact us! We do not represent individual consumers. We advise businesses on major contracts, investments and financing. 

Hotels have seen substantial losses in revenue in the wake of the coronavirus, and face the uncertainty of an economy which may take months or years to recover. For many, insurance payments may assist in keeping their business afloat, but few hotel owners or lenders are making claims. JMBM partner Guy Maisnik explains how some hotels may qualify for Business Interruption insurance coverage for COVID-19.

– Jim

Business Interruption Insurance may cover hotel losses
from COVID-19 shelter with judicial claims

Many coverage exclusions focus on disease, not government shelter orders

Guy Maisnik

Hotel owners and underwriters have seen the economic prognosis for hotels for the next twelve to twenty-four months, and it does not look good. Modern America 2.0 will not be the America of January 2020 for a long time.

The “V” uptick in the U.S. and world economy will come when the world can pass the “middle aisle test,” as in when will you comfortably: 1) take the middle seat in public transportation and travel; 2) sit on a bar stool or restaurant counter between two others; and 3) attend sports or entertainment events or other public gatherings. Until then, the bottom of the economic “U” may feel like an eternity.

A mistake not to pursue claims

So, what does this have to do with insurance? Everything. Because insurance payments might sustain your business until your guests can pass the middle aisle test. By now, you have read a number of articles written by lawyers and consultants on business interruption insurance – some more measured and analytical and others more aggressive.

Many hotel owners (or their lenders, surprisingly) are not bothering to make insurance claims at the advice of their insurance agents or counsel. These advisors believe there is a low likelihood of making a successful claim based on the 2006 Insurance Services Office (ISO) circular – Form CP 01 40 07 06, which excludes from coverage the loss or damage caused by “virus, bacteriaum or other micororganism that induces or is capable or inducing physical distress, illness or disease.”

In our view, this is a mistake. We believe hotel owners and capital providers should carefully review their insurance policies and coordinate with their consultants, lawyers and brokers to determine whether an aggressive approach is possible.

Policy exclusions are narrowly construed

First, all business interruption insurance policies are not the same. A sophisticated buyer of insurance services – and its legal counsel – will have their policies carefully analyzed. Depending on the policy and applicable law, there can be meritorious arguments in support of coverage, even if a hotel is open and operating.

Second, history and case law are replete with apparently so-called airtight policy exclusions only to find a court holding an insurer liable for coverage. Katrina is the most notable example, with insurers paying out approximately $900 million in coverage notwithstanding flood exclusions. Recently, the Seventh Circuit held that a manufacturer’s insurer must cover its insured, a designer and builder of anaerobic digesters, under its errors and omissions policy for claims alleging breach of contract, despite an express exclusion in the policy for claims arising out of a breach of contract. Similarly, the Ninth Circuit held that a war exclusion did not apply when an entertainment production company incurred damages as a result of Hamas rocket attacks.

The point is that insureds who purchased business interruption insurance and paid expensive policy premiums, should strongly consider pursuing coverage, even if not apparent under the precise language of a policy, particularly taking into account the policy terms, applicable law – both case and statutory – and prior judicial decisions.

The case for income loss coverage

The coronavirus pandemic caused states, cities and counties throughout the U.S. to impose social distancing measures in the form of stay at home, shelter in place and other executive type orders, and required businesses to close and remain closed until otherwise directed. Excluded from such orders were so-called essential businesses, which often included hotels. Regardless of whether a hotel is open or not, such closure and limited closure requirements seriously crippled virtually all hotel revenue demand drivers (i.e., businesses, restaurants, entertainment venues, schools, and so forth). This has had led to disastrous consequences for hotel businesses, severely reducing demand, disrupting operations and supply chains, causing a loss of income. The income losses will extend well beyond the date such orders are removed.

Hotels are suffering damages in a variety of ways as a result of COVID-19 and the shelter orders, most notably income loss, fixed expenses during partial or total closure, structure contamination, reputation damages and third-party claims.

Insurers will aggressively defend

True, there are hurdles to overcome. Given the state of the insurance industry and the large number of claims being made, it is unlikely that your insurance company will simply roll over and write a check. The insurer’s first (and not only) defense will likely be “virus, bacteriaum or other micororganism” exclusion from coverage under its policy, and that further the 2006 circular specifically addresses loss of business income. Hotel policies may also explicitly exclude coverage for property damage and loss resulting from viral and bacterial contaminants such as SARS, MERS, avian flu and the coronavirus. Insurers may even bring their own claim in a separate suit for declaratory relief that there was not an insurable event, which under a business interruption policy is generally defined as a direct physical loss or damage. Regardless, courts may well determine that business interruption and losses were caused by governmental order and not a viral pandemic.


Published on:

27 April 2020

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


Hotel Lawyer: Increasing Distressed Hotel Loans and Troubled Hotel Assets

This article was published originally in November 2008 on HotelLawBlog.com and then updated in 2010 for our Lenders Handbook for Troubled Hotels. In light of the recent increase in distressed loans provoked by the COVID-19 crisis and resulting economic impact, we thought it might be important to bring the information current through April 2020.

Can a hotel ever be “single asset real estate” for bankruptcy purposes?
What is “SARE” and who cares?

Jim Butler, Bob Kaplan, and Nick De Lancie

Hotel Lawyers: Lender tips on forbearances, loan modifications, recapitalizations, receiverships, workouts, turnarounds, restructurings, and bankruptcies

CMBS lenders and others use SPEs for expedited remedies

Hotels, resorts, marinas, retail mixed-use, and other hospitality-related assets will likely continue to present challenges to lenders seeking expedited relief from bankruptcy stay provisions available to creditors in “single asset real estate” bankruptcy cases.

Since the mid-1990s, lenders on hotels, resorts, and other hospitality properties have generally required their borrowers to transfer the asset being financed into an entity (generally a corporation, limited liability company, or limited partnership) that was both “bankruptcy remote” (a “BRE”) and “special purpose” (also called “single purpose”) (an “SPE”). An SPE is an entity that owns only the asset being mortgaged, is unlikely to become insolvent due to its own activities, and is generally protected from the effects of the insolvency of its affiliates. A BRE is an SPE that has a further, structural layer of protection for the lender provided by provisions, such as the requirement for an independent director or manager who must approve the commencement of any bankruptcy case, that make its bankruptcy case more difficult.

Under the Bankruptcy Code, if a bankruptcy case involves “single asset real estate” (often called “SARE”), the proceedings will tilt greatly in favor of the lender/creditor secured by that SARE. Intuitively, then, an SPE that holds a single real estate asset would seem automatically to hold “single asset real estate” under the Bankruptcy Code. It is not, however, that simple.

This article will examine why this is important to lenders and borrowers, give an overview of the SARE determination, and provide some practical strategies.

The legal significance of SARE status (or not) for lenders

The determination that a borrower/debtor holds “single asset real estate” has important consequences for its bankruptcy case. In a SARE case, the creditor/lender secured by the real estate asset will be entitled to relief from Bankruptcy Code’s automatic stay as a matter of right unless the debtor does one of two things within 90 days (subject to extension) of commencing its case.

Under Bankruptcy Code section 363(d)(3), to avoid relief from the automatic stay being granted to a secured creditor (if it seeks it) with “single asset real estate” collateral, the debtor that holds that collateral must, within that 90 days, either:

  1. File a plan of reorganization in its case that has a reasonable possibility of being confirmed within a reasonable time; or
  2. Commence making monthly, interest-only payments to the secured creditor at the then-applicable non-default contract rate of interest on the value of the creditor’s interest in the SARE.

These are often difficult to accomplish unless the real estate asset is really viable and cash is flowing. CONTINUE READING →

Published on:

01 April 2020
Click here for the latest articles on Labor & Employment.
Click here for the latest articles on the coronavirus.

Note: If you are an individual consumer with coronavirus-related travel issues, please do NOT contact us! We do not represent individual consumers. We advise businesses on major contracts, investments and financing. 

Following the enactment of the Families First Coronavirus Response Act on March 18, 2020, the Department of Labor has clarified which employers will be impacted by the Act and how they can comply with its mandates. Marta Fernandez, hotel lawyer and a partner in JMBM’s Labor & Employment department, has answered some of the most frequently asked questions by employers about the Act which goes into effect on April 1, 2020.
What hotel owners and operators need to know
about employee rights under the FFCRA

Marta Fernandez

Frequently Asked Questions or FAQs about employee rights under the Families First Coronavirus Response Act

Effective April 1, 2020 and continuing through December 31, 2020, covered employers need to begin complying with the mandates of the Families First Coronavirus Response Act (“FFCRA” or “Act”). You can find our original article explaining the FFCRA here. Since the law’s enactment on March 18, 2020, the Department of Labor has clarified and expanded upon what precisely is required under the Act and of whom it is required. Below are some of the questions we have been receiving from clients. The answers provided reiterate some of the previously announced requirements, and incorporate the additional guidance that has been issued by the Department.

#1 What obligations do covered employers have under the FFCRA?

Covered employers must provide eligible employees with up to 80 hours of emergency paid sick leave and up to 12 weeks of emergency family and medical leave.

#2 When is an employee eligible to receive paid sick leave under the FFCRA?

Under the FFCRA, a full-time employee may qualify for 80 hours of paid sick leave (or, for a part-time employee – the average number of hours that the employee works over a typical two-week period) where the employee is unable to work, or telework, due to a need for leave because the employee:

  1. Is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  2. Has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  3. Is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
  4. Is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
  5. Is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or
  6. Is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

#3 How much compensation is an employee entitled to receive under the paid sick leave provisions of the FFCRA?

Employees taking leave for reasons 1, 2, or 3, noted above must be paid at either their regular rate or the applicable minimum wage, whichever is higher, with a cap of $511 per day and $5,110 in the aggregate.

Employees taking leave for reasons 4, 5, or 6 above must be paid at two-thirds their regular rate or two-thirds the applicable minimum wage, whichever is higher, with a cap of $200 per day and $2,000 in the aggregate.

The Department has now clarified that an employee’s regular rate of pay is the average of the employee’s regular rate over a period of six months prior to the date on which he or she takes leave.

#4 Can I require employees to substitute any accrued paid time off for the emergency paid sick leave?

No. While employees may elect to substitute any accrued vacation leave, personal leave, or medical or sick leave for the emergency paid sick leave, you cannot require employees to do so.

#5 What if I’ve already provided my employees with paid leave for a COVID-19 related reason?

The emergency paid sick leave is to be provided in addition to any other paid leave that an employer has already provided to its employees. Thus, leave taken prior to April 1st does not count towards the leave required under the Act.


Published on:

01 April 2020

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on distressed hotel loans and here for The Lenders Handbook for Troubled Hotels.

Alternative Strategies
for Troubled Hotel Mortgage Loans
Jim Butler
JMBM’s Global Hospitality Group®

When a hotel loan gets in trouble, a lender should immediately perform a Comprehensive Situation Analysis. Borrowers should do the same and be fast to approach lenders with candor and an actual plan demonstrating what is needed and how it will work.

This Comprehensive Situation Analysis is the foundation for making some of the most important decisions that the lender and borrower will face on what to do with a distressed loan or asset.

When the Comprehensive Situation Analysis is completed, what’s next? What do the amassed facts indicate? How do they tell the parties what to do? What are the alternatives for dealing with a troubled hotel loan?

Basically, the alternatives for a lender with troubled hotel asset are:

    1. Do nothing (or sell the loan)
    2. Workout the loan
    3. Appoint a receiver
    4. Seek a deed-in-lieu
    5. Commence foreclosure
    6. Seek Relief in bankruptcy proceedings

The matrix below shows how many of the relevant factors will suggest the appropriate alternative to select.

Please let me know if you have seen any significant considerations we have missed.


Contact Information