Hospitality: Bankruptcy and Restructuring
Our team also advises acquirers looking to purchase hotels in distress, including through a loan to own strategy where acquirors purchase secured debt, fund an organized chapter 11 proceeding, and then serve as a bidder of the assets to purchase them free and clear of liabilities in chapter 11. And we represent equity owners facing unique challenges that arise from special situations, particularly with respect to guarantor issues.
- Stakeholders in Caesars: ArentFox Schiff represented creditors holding approximately $750 million of second lien debt in the reorganization of Caesars Entertainment Operating Company (CEOC). We were instrumental in developing and implementing a strategy to maximize leverage against the company’s sponsors and develop a plan that maximized value, including the value of the company’s market leading total rewards program and its vast real estate portfolio. Ultimately a consensual resolution was reached where CEOC separated its US based property assets from its gaming operations and spun into a real estate investment trust’s and CEOC’s parent Caesars Entertainment merged with Caesars Acquisition Group. Holders of second lien debt recovered above par and the company reduced its $18 billion debt by more than $10 billion.
- Acquirors of Grossingers Hotel; Inn at Gorge; Various Marriott-Related Entities: ArentFox Schiff represented acquirors of distressed hotels, advising them on how to manage liabilities, deal with employment issues, address counterparty agreements and emerge from chapter 11 in a position to succeed.