Hotel Law Blog

Published on: March 17, 2008

Green Hotel Lawyer: Why should you do GREEN hotel development, and HOW do you do it?

By Jim Butler and the Global Hospitality Group®

Author of www.HotelLawBlog.com
17 March 2008
Green hotel lawyer at the UNLV-JMBM Hotel Developers Conference™ 2008, Las Vegas, Nevada. In my last posting on www.HotelLawBlog.com, I talked about the keynote address given by Dan Esty at this conference on GREEN hotel development, rehab and operation. Dan Esty is a Yale professor and environmental consultant to businesses including the Fortune 1000. He is also one of the most relevant, practical and influential geniuses observing and guiding businesses in coping with and profiting from greener and more sustainable behavior. If you have not read his seminal Green to Gold, you should do yourself a favor and go to Amazon.com and get a copy right away. It certainly changed my perspective on things. (see Green Hotel Development Lawyer: UNLV-JMBM Hotel Developers Conference 2008)

But the green hotel development conference was also the stage for a 5-star line up of some of the most advanced thinkers and prestigious leaders at the intersection of hospitality, development, architecture, design, engineering and sustainability. They included the thought leaders and battle-scarred veterans from the trenches working on already-successful and still-pending green hotel development projects who raised many thought-provoking, controversial, and often troublesome, challenges to our conventional thinking and business-as-usual approaches. It seemed clear to me that the sea change has occurred. It is only a question of when our boats rise or fall with tide.

Who was there? What did they say? Why was it so important? Well, here are some more of the details and my take on this whole “green hotel development thing” . . .

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Published on: March 16, 2008

Green Hotel Development Lawyer: UNLV-JMBM Hotel Developers Conference 2008

By Jim Butler and the Global Hospitality Group®

Author of www.HotelLawBlog.com
16 March 2008
Las Vegas Hotel Developers Conference. For the hundreds of hotel developers, operators, builders, vendors and consultants that flew into Las Vegas to attend the UNLV-JMBM Hotel Developers Conference™, it was hard to miss the half-dozen towers pushing up from the desert floor that mark MGM Mirage CityCenter™.

Learning how (and why) this $8 billion construction effort — the largest privately constructed building effort in North America — is building “green” into every facet of the project was just one of the highlights of the first day’s program at the UNLV-JMBM Hotel Developers Conference™ on Green Hotels. To see the growing library of green hotel resources listed in www.HotelLawBlog.com go to Green Hotel Lawyer: ULI’s Urban Land article on Greening Hotels.)

Here are some more details

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Published on: March 16, 2008

Green Hotel Lawyer: ULI’s Urban Land article on Greening Hotels

By Jim Butler and the Global Hospitality Group®

Author of www.HotelLawBlog.com
16 March 2008
Green Hotel Lawyer: The compelling economic case for building, developing and converting green hotels. This is not about the “soft stuff” of why green is right (it is, but that is a different discussion), it is much more pragmatic.

Starting shortly after JMBM’s annual Hotel Developers Conference 2007, when JMBM had a great panel of green hotel experts, www.HotelLawBlog.com has covered the compelling hard economics of green hotels. For example, go to HotelLawBlog.com and see Hotel Lawyer on the “real economics” behind the paradigm shift to GREEN hotels.

But the library of great resource materials on how to develop, convert and operate green hotels continues to grow. ULI has just published Jim Butler’s latest article on the hard economics of greening hotels. Here is the latest. . .

CONTINUE READING →

Published on: February 14, 2008

Hotel Lawyers Hotel Developers Conference 2008

By Jim Butler and the Global Hospitality Group®

UNLV-JMBM Hotel Developers Conference™ – March 11-13, 2008
Green Hotel Development, Renovation and Operation
The Business Case for Green Hotels: Practical “How to” Tips from the Trenches
A “Gen 2” Hotel Conference

LAS VEGAS and LOS ANGELES – February 14, 2008 – The UNLV-JMBM Hotel Developers Conference,™ co-sponsored by the Harrah Hotel College at the University of Nevada Las Vegas (UNLV) and the Global Hospitality Group® at Jeffer, Mangels, Butler & Marmaro LLP (JMBM), announced the first conference devoted solely to green hotel development, renovation and operation. Current registration suggests more than 500 hotel owners, developers, and lenders will attend the conference, which will take place March 11-13 at the Green Valley Ranch Resort and Spa in Las Vegas.

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Published on: February 5, 2008

Hotel Lawyer — How to terminate a hotel management agreement when an operator really deserves it!

By Jim Butler and the Global Hospitality Group®

Author of www.HotelLawBlog.com
5 February 2008
Hotel Lawyer on how to terminate a hotel management agreement when an operator really deserves it. The love-hate relationship between hotel owners and operators is as old as the institution of hotel management arrangements (going back to the 1970s). A good hotel operator can add up to 25% to the value of a hotel. A bad one can subtract the same amount or even more. In 20 years of focusing on the hotel industry, and specializing in representing hotel owners, developers and lenders in more than $87 billion of hotel transactions involving more than 1,000 hotels around the world, we have seen a lot of eager owners anxious to sign up with a big hotel brand, thinking that was the end of their worries. Often it is.

Often it is NOT. . .

But hotel owners don’t come to hotel lawyers to tell them how happy they are with a hotel operator. They either come to hotel lawyers to get help in signing up a hotel operator, or to complain about the unbearable financial pain caused by the incompetence, dishonesty and arrogance of their hotel operator. Sometimes the complaints are well-grounded and justify the termination of the long-term hotel management agreement, and perhaps even millions of dollars of compensatory and punitive damages. (See for example, the experience of our client in Ritz-Carlton breached contractual and fiduciary duties . . . When will hotel operators “get it”?).

[And for a wealth of related articles, see the “Hotel Management Agreement” topic on Hotel Law Blog.]

CONTINUE READING →

Published on: February 3, 2008

Hotel Lawyer — Latest data points to the future: What’s in store?

By Jim Butler and the Global Hospitality Group®

Author of www.HotelLawBlog.com
3 February 2008
Hotel Lawyer reading the Smith Travel Research tea leaves from the ALIS Conference. A few days ago, Mark Lomanno made one of his great presentations at the ALIS (Americas Lodging Investment Summit) Conference to a ballroom packed with most of the 3,100 registered delegates. All were eager to hear the latest data, in order to see where we have been and where we are going. As usual, Mark was kind enough to share his latest slides. You don’t want to miss this!

My quick “take-away” summary? Last year was a very good year (5.5% RevPAR growth). This year will be good (4.5% RevPAR growth), all things considered, but it will better for some (luxury, mid segment without F&B, top 25 markets) than others, and there are warning clouds on the horizon.

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Published on: February 1, 2008

Hotel Lawyer: Ritz-Carlton breached contractual and fiduciary duties under hotel management agreement giving rise to free termination, $10.3 million in damages plus attorneys fees. When will hotel operators “get it”?

By Jim Butler and the Global Hospitality Group®

Author of www.HotelLawBlog.com
1 February 2008
Keywords:

Hotel Operating Agreement, HOA, Hotel Management Agreement, HMA, Hotel Management Contract, Management Contract. Hotel Operator, Hotel Manager, Hotel Owner. RFP for Hotel Manager. RFP for Hotel Operator, How to get a great hotel operator.

Terminology

Contracts between hotel owners and managers (or operators) controlling the management of a hotel go by various names. They are called hotel management agreements, HMAs, hotel management contracts or hotel operating agreements. For convenient reference, this article will generally use the term “Hotel Management Agreement” or “HMA.” However all these terms can be used interchangeably and mean the same thing, just as with hotel operator or hotel manager.

Whatever they are called, Hotel Management Agreements allocate risk between the hotel manager and the hotel owner. They are critical in determining the profitability and value of a hotel.

Hotel Lawyer on hotel management agreements and operator breach of duty. It may be an exaggeration to say that “JMBM wrote the book on hotel management agreements,” but we certainly know the area and have at least written a few chapters in that book. We have been helping owners, developers and lenders with many hundreds of hotel management agreements over the past 20 years. We have negotiated, re-negotiated, terminated and litigated almost every aspect of them, so the only thing surprising about the latest jury verdict handed down on January 25, 2008 against Marriott International and Ritz-Carlton is that it shows a continuing disconnect of operators who choose to ignore their contractual and fiduciary duties. (Search “Management Agreements” at www.HotelLawBlog.com)

In this case, one of our clients owned the Ritz-Carlton Bali which was managed under a typical long-term, no-cut management contract. A few days ago, after a 3 week trial, a jury sitting less than 10 miles from Ritz-Carlton’s home office ruled that the management contract was breached by Marriott International and Ritz-Carlton, giving the owner the right to terminate the contract, awarding $382,304 in compensatory damages, $10 million in punitive damages, plus attorneys fees and costs to the owner. The Wall Street Journal published an article today by Tamara Audi on the case. How does this happen?

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Published on: February 1, 2008

Hotel Lawyer with GREEN GEMS from the Los Angeles Hotel Investment Conference

By Jim Butler and the Global Hospitality Group®

Author of www.HotelLawBlog.com
31 January 2008
Hotel Lawyer with GREEN GEMS from the Los Angeles Hotel Investment Conference.

Hotels are going green (really)! And sustainability is the hot issue in the hotel industry.
Although hotels have been the last real estate asset class to embrace sustainability, it looks like things are really changing. At the ALIS conference, recycling trash containers were a welcome sight, and the program featured a full panel on green hotels, a keynote, and lots of mentions about sustainability by many of the speakers.

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Published on: January 29, 2008

Hotel Lawyer: Hotel Investment Conclave. How do you finance your hotel today?

By Jim Butler and the Global Hospitality Group®

Author of www.HotelLawBlog.com
29 January 2008
Hotel Lawyer Los Angeles Hotel Investment Conference. A year ago today, we predicted that the hotel industry might be acquired through equity-fund driven acquisitions. (Size no longer matters, and Two deals that may change the lodging world forever). Since that time, many REITs and Hilton were gobbled up (Hilton acquisition) before the capital markets all but seized up in August 2007.

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Published on: October 22, 2007

Hotel Lawyer on the “real economics” behind the paradigm shift to GREEN hotels

By Jim Butler and the Global Hospitality Group®

Author of www.HotelLawBlog.com
23 October 2007
Hotel Lawyer on GREEN hotels. Business Week just published an eye catching story on “Little Green Lies” — why some environmental initiatives may not currently make economic sense, even if others do. But what are the real economics behind GREEN hotel development, conversion and operation? Is this the time to go green? Can you afford to wait?

Here are some solidly documented answers based on substantial, and reliable studies. The answers may surprise you.

CONTINUE READING →

Jim Butler

Jim Butler is recognized as one of the top hotel lawyers in the world. He devotes 100% of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM’s Global Hospitality Group® — a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion.
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Robert Braun

Robert Braun is a partner in JMBM's Corporate Department and a senior member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Bob represents owners in both transactional and operational issues. He advises clients with respect to business formation, financing, mergers and acquisitions, venture capital financing, joint ventures and strategic partnerships. He has represented hotel owners in the negotiation of several hundred management agreements, as well as spa management and franchise agreements. Bob also advises hotel owners regarding telecommunications, software, internet, e-commerce, data processing and outsourcing agreements. To read Bob's articles, go to www.HotelLawBlog.com and select "Management Agreements." For more information, please contact Bob Braun at 310.785.5331 or rbraun@jmbm.com.

Marta Fernandez

Marta Fernandez is a partner in JMBM's Employment and Labor Department and a senior member of JMBM’s Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. As a management labor lawyer with more than 20 years of experience, Marta specializes in representing hospitality industry clients in all aspects of labor and employment including labor-management relations such as union prevention, collective bargaining for single as well as multi-employer bargaining units, neutrality agreements and defense of unfair labor practice charges before the NLRB. She defends employers in administrative and litigation claims, such as employee claims of sexual harassment and discrimination and counsels clients in preventative strategies such as executive training, arbitration enforcement, and policies and procedures. To read Marta's articles, go to www.HotelLawBlog.com and select "Labor & Employment." For more information, please contact Marta Fernandez at 310.201.3534 or at mfernandez@jmbm.com.

Guy Maisnik

Guy Maisnik is a partner in JMBM's Real Estate Department and a senior member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Guy's deep and broad transactional practice includes complex real estate finance and venture capital transactions, including project finance, commercial finance, leveraged leasing and real estate acquisitions. He assists clients with development, leasing and disposition, loan portfolio acquisitions, loan and debt restructure, workouts and real estate exchanges. Go to www.HotelLawBlog.com for current information in these areas. For more information, please contact Guy Maisnik at 310.201.3588 or mgm@jmbm.com.

David Sudeck

David Sudeck is a Partner in JMBM's Real Estate Department and a senior member of JMBM’s Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. David has significant experience in the vacation ownership arena, focusing on the formation and registration of condominiums, timeshares and fractional interest regimes. He negotiates hotel, spa and restaurant management agreements, and assists client in the development, acquisition, sale and leasing of hotels, golf courses and restaurants. For David's take on current issues in the timeshare arena, go to www.HotelLawBlog.com and click on the topic, "Timeshare." For more information, please contact David Sudeck at 310.201.3518 or dsudeck @jmbm.com.

Robert Kaplan

Robert Kaplan is a partner in JMBM's Bankruptcy, Insolvency and Restructurings Group and a senior member of the Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Bob represents lenders, special servicers, hard money lenders, community banks, national banking associations, distressed debt investors, and equity investors, positioning them for the best possible outcome by acting expeditiously to preserve value and increase cash flow. His industry experience and his knowledge of the current capital markets -- where distressed assets often include complex deal structures and securitized loans -- allows him to bring creative and effective strategies to the table. When aggressive litigation is the best strategy, he is a vigorous and effective advocate for his clients. Bob represented the securitized lender in the Chapter 11 bankruptcy case filed by the Clift Hotel in San Francisco, and in the subsequent negotiations and successful sale of the loan to a third party. The lender -- acting by and through GMAC Commercial Mortgage Corporation as special servicer -- was the holder of a $60 million loan secured by a Deed of Trust on the Clift Hotel. He has also served as counsel to CapMark, J.E. Robert Company, Inc., AMRESCO Management Inc. and Midland Loan Servicer in their capacity as special servicers on troubled hotel loans in CMBS pools. For more information, contact Robert Kaplan at 415.984.9673 or rkaplan@jmbm.com.

Martin Orlick

Martin Orlick is a partner in JMBM's Real Estate Department and a senior member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Marty specializes in representing hospitality industry clients in Americans With Disabilities Act (ADA) compliance and defense. He has represented more than 500 businesses in ADA issues, many of them hotels and restaurants, as well as hotel mixed-use properties. Marty is a member of the American College of Real Estate Lawyers (ACREL) and a frequent speaker on the ADA and other topics. To read Marty's articles, go to www.HotelLawBlog.comand select "ADA." For more information, please contact Marty Orlick at 415.984.9667 or morlick@jmbm.com.

Scott Brink

Scott Brink is a senior member of JMBM's Global Hospitality Group® and a partner in JMBM's Labor & Employment Law Department. Scott is a management labor lawyer with more than two decades of experience representing employers in all aspects of labor relations and employment law including union prevention, collective bargaining negotiations, defense of unfair labor practice charges before the NLRB, wrongful discharge litigation, individual and class action employment discrimination and wage-and-hour claims, sexual-harassment litigation, arbitrations, personnel policies, California wage and hour law, and employee discipline and discharge. An experienced trial attorney, Scott has litigated a number of high-profile and complex cases involving a wide range of labor and employment law matters. For more information, contact Scott Brink at RSB@jmbm.com or 310.785.5365.

Travis Gemoets

Travis Gemoets is an experienced trial attorney and represents management in all facets of labor and employment law, including wage/hour class actions, claims of discrimination, harassment, wrongful termination, trade secrets and unfair competition, union/management relations and workplace violence. He is a member of JMBM's Global Hospitality Group(r), in which capacity he negotiates union contracts and resolves labor disputes throughout the country, defends class action claims, develops strategies for the mass onboarding and separation of employees, and recommends proactive changes to employers' policies and practices in order to minimize potential liability risks. Reach him at 310.785.5387 or tgemoets@jmbm.com.

Mark S. Adams

Mark S. Adams is an experienced trial lawyer and a member of JMBM's Global Hospitality Group® and Chinese Investment Group™. He focuses his practice on business litigation including contracts, corporate and partnership disputes, and hospitality disputes and litigation. On behalf of hotel and resort owners, Mark has successfully litigated the termination of long-term, no-cut, hotel management agreements, franchise agreements, fiduciary duty issues, investor-owner disputes, TOT assessments, and more. He has wide-ranging trial experience in a variety of commercial disputes, including complex multi-party litigation and class actions. He has tried numerous cases in state courts, federal courts, and in domestic and international arbitrations, and is a frequent author and speaker on trial practice. Mark's trial wins have been covered by Forbes, Reuters, and other publications. He has obtained two of California's annual 50 largest jury verdicts in the same year. Mark has taken or defended nearly 1,000 depositions throughout North America, Europe and the Middle East. He has been quoted as an expert on noncompete agreements in the Wall Street Journal. For more information, contact Mark at 949. 623.7230 or markadams@jmbm.com.

Bennett Young

Bennett Young is a partner in JMBM's Bankruptcy, Insolvency and Restructurings Group and a senior member of the Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. His clients include lenders, financial institutions, secured and unsecured creditors, distressed investment funds, businesses, receivers, special servicers and creditors' committees. Ben represented the owner of a partially completed multi-billion dollar resort property in the restructuring of its finances and has represented lenders to hotels and casinos. For more information, contact Ben Young at 415.984.9626 or byoung@jmbm.com

Sheri Bonstelle

Sheri Bonstelle is a partner in JMBM's Government, Land Use, Environment and Energy Department, and a member of JMBM's Global Hospitality Group®. She represents owners and developers in land use, zoning, environmental, litigation and construction matters. She manages all aspects of the entitlement process, including representing clients before local and state agencies, commissions and councils. Sheri also represents clients in a variety of land use and real estate litigation matters in state and federal courts, including cases arising under CEQA and other environmental laws. Her hotel experience includes handling the adaptive reuse of an historic office building as a luxury boutique hotel. For more information, please contact Sheri Bonstelle at 310.712.6847 or SBonstelle@jmbm.com.

Kevin McDonnell

Kevin McDonnell is a partner in JMBM's Government, Land Use, Environment and Energy Department, and a member of JMBM's Global Hospitality Group®. Kevin represents developers and owners of hotels in a broad range of land use and zoning issues including entitlements, code enforcement, easements and parking requirements, as well as related Parcel Map and Tract Map subdivision issues. His hospitality experience includes hotels, condo-hotels and mixed-use projects. A registered Civil Engineer and Structural Engineer in California, and a former building official for the City of Los Angeles, Kevin brings unique experience and insight in Zoning and Building Code applications and Code Enforcement issues. For more information, please contact Kevin McDonnell at 310.201.3590 or kkm@jmbm.com.

Jamie Ogden

Jamie Ogden is a tax lawyer at Jeffer Mangels Butler & Mitchell LLP. He advises individuals and businesses on a range of tax planning, tax controversy and estate planning matters. Jamie’s experience includes all tax aspects with respect to the hospitality industry, including acquisitions and dispositions (including Section 1031 exchanges), financing and management agreements. He also serves as lead tax counsel on M&A transactions, financing, internal corporate restructurings and deferred compensation matters. Jamie also works frequently with litigators on the tax aspects of litigation, judgments and settlements. Jamie has extensive experience with foreign compliance matters, including each variation of the IRS amnesty programs. In addition to his experience in private practice, Jamie also brings several years of service from both state and federal government. For more information, contact Jamie at JOgden@jmbm.com or 310.201.3510.

Jay Thompson

Jay Thompson has extensive experience representing private companies, business owners, family offices and investors in mergers and acquisitions, private equity and venture capital transactions and private securities offerings. Jay serves as general counsel to many of his clients, their management, and board of directors, helping to shape and execute their business strategies, facilitate growth and liquidity, as well as to advise them on day-to-day legal and other strategic issues. He is known for his practical approach to business issues. Contact Jay at JThompson@jmbm.com or 949.623.7258

Marianne Martin

Marianne Martin has nearly fifteen years of experience advising clients on a variety of commercial, financing, bankruptcy, restructuring and M&A matters, with a particular niche dealing with distressed and/or turnaround situations. Her clients frequently include private equity and hedge funds, independent sponsors, family offices, public and private corporations, financial institutions and banks, healthcare-related companies, municipalities and venture capital funds. She has represented clients in various capacities, including as borrowers/debtors, lenders, acquirers, and agents/trustees in negotiating and documenting complex commercial transactions, out-of-court restructuring transactions and advising on purchasing considerations in secondary market debt transactions. Contact Marianne at MMartin@jmbm.com or 310.201.3531

Trevor Countryman

Trevor Countryman is an associate in the firm's Real Estate Department. He advises clients in all aspects of real estate transactions including property acquisitions and dispositions, financing, leasing, development and construction. Trevor's clients range from large funds to individual developers and opportunistic investors, engaged in deals involving office, retail, multi-family, single-family, mixed-use and hotel properties. Contact Trevor Countryman at 310.201.3546 or TCountryman@jmbm.com.

Vanessa Han

Vanessa Han is an associate in JMBM's Corporate group. Vanessa can be reached at VHan@jmbm.com or 310.785.5383

Vince Farhat

Vince Farhat is Chair of JMBM's White Collar Defense and Investigations practice. Vince has extensive jury trial experience and focuses his practice on representing companies and individuals in criminal and civil investigations and prosecutions by government enforcement agencies, as well as complex federal litigation. He also advises companies in connection with complex and sensitive internal investigations. Prior to joining JMBM, Vince served as an assistant United States attorney in the Major Frauds Section of the U.S. Attorney's Office for the Central District of California. Contact Vince Farhat at 310.785.5382 or VFarhat@jmbm.com.

Sarah G. Hartman

Sarah G. Hartman is a partner in JMBM's Litigation Group and a member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Sarah is an experienced litigator who advises and represents clients through all aspects of litigation, from inception through trial and appeal. She advises and represents clients in the hospitality industry, including the termination of hotel management agreements and franchise agreements. Sarah also advises and represents clients on women's health technology issues, intellectual property matters, and complex commercial disputes, including breach of fiduciary duty, fraud, breach of contract, unfair competition, products liability, employment litigation, class action defense, false advertising and other complex financial disputes. Contact Sarah Hartman at 949.623.7243 or SGHartman@jmbm.com.

Michael H. Strub, Jr.

Michael H. Strub, Jr. is a partner in JMBM's Litigation Group and a member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. He is a highly skilled trial and appellate attorney who has handled high-stakes, complex commercial and business cases for 30 years including disputes arising out of hotel construction, lending, and bankruptcy. In addition, he has represented plaintiffs and defendants in business and commercial disputes in a variety of areas. Contact Michael H. Strub, Jr. at 949.623.7233 or MStrub@jmbm.com.

Ask the Hotel Lawyer™ is a quarterly column that I write for JMBM's Global Hospitality Advisor®. If you have a question you would like to submit to Ask the Hotel Lawyer™ please use the comments box below. While your question may not be of sufficient general interest for the column, I will try to respond to you individually if you leave your contact information below.
Jim Butler.

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