| |
| |
| vol 18, num 2 | October, 2021 |
| |
|
|
| |
|
|
|
|
|
| |
| Selling Significant Assets Without a Stalking Horse: Is It Risky? |
| When selling significant assets in chapter 11, more often than not debtors and their professionals proceed with a stalking-horse bid. On occasion, however, we do see assets valued at $100+ million on the auction block without a stalking-horse bid. One such example is the currently pending chapter 11 case of In re Wardman Hotel Owner LLC (the debtor), pending in the U.S. Bankruptcy Court for the District of Delaware under Case No. 21-10023. At the time of the commencement of that chapter 11 case, the debtor was the owner of the Washington Marriott Wardman Park Hotel. The debtor sought to sell the hotel assets through its bankruptcy
proceeding for a minimum bid of $100 million, but without entering into a stalking-horse sale agreement. Did the benefit of proceeding in that fashion outweigh the inherent risks? Before we delve into that issue, it is important to first provide some contextual background. |
| |
|
|
|
|
| |
|
| |
| Issues and Perspectives of Hotel Asset Management Through the Pandemic |
| The pandemic and its enormous global impact clearly demonstrate the latent volatility of hospitality real estate. The lodging industry is perhaps the most labor capital-intensive sector of real estate, and it is unequivocally being stressed by the pandemic. National U.S. hotel occupancy has been historically consistent, with occupancy percentages in the mid-60% range, until COVID-19 took national occupancy to an all-time low of 44%. Only now in 2021 has an improvement in travel begun. Pent-up demand, plus COVID optimism, drove last-minute bookings at a pace that has never occurred in the industry. Though occupancy has yet to fully recover,
average daily rate (ADR) growth has been favorable. As of July 2021, revenue per available room (RevPAR) has tracked back to 2019 levels — but will it hold? |
| |
|
| |
|
|
|
| |
|
| |
| Casa Bonita May Find Its Home with the “South Park” Creators |
| Elementary school student Eric Theodore Cartman described his experience at Casa Bonita as “totally” worth making an entire town panic, losing all his friends and going to juvenile hall for a week in an episode of the TV show “South Park.” For more than four decades, Casa Bonita, located in Denver, has been an iconic Colorado “eatertainment” establishment offering dining and entertainment, including cliff-diving shows, live music and an amusement arcade. Now stricken by bankruptcy and its future uncertain, Casa Bonita could very well find a home with the creators of “South Park.”
Like many restaurants, the COVID-19 global pandemic devastated Casa Bonita when government mandates forced it, along with other restaurants, to be temporarily closed. When Casa Bonita was allowed to reopen its doors, it was only able to operate at 2-18% of its seating capacity due to various state and county pandemic restrictions. Worse, the restrictions prevented Casa Bonita from offering entertainment, a signature — and vital — element of its business model.
Despite receiving a Paycheck Protection Program loan of more than $1 million, Casa Bonita remained crippled by the pandemic, which devasted the restaurant’s revenue stream that was dependent on operations. As a result, Summit Family Restaurants, Inc, d/b/a Casa Bonita, filed a subchapter V petition on April 6, 2021. |
| |
|
|
|
|
| |
|
| |
| Upcoming abiLIVE: Key Concepts in Subchapter V Real Estate Cases |
 |
|
Join ABI's Real Estate Committee on Friday, October 29, at 12:30 p.m. EDT and a panel of subchapter V trustees, as well as attorneys counseling debtors and creditors, as they discuss the basic tenets of the subchapter V legislation. The discussion will include revisions made to the CARES Act of 2020, with a focus on real estate-based cases. The speakers will also focus on the unique issues in play, the common types of real estate cases being filed, success stories, debtor watch-outs, and misconceptions about the role of subchapter V trustees.
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
