In Part 1 of this blog topic, I talked briefly about the the cost of hotel receivership services related to a rents and profits action and a court appointed hotel receiver and interim hotel management. Where there is a judgement to collect, such as an outstanding balance owed on sales taxes or a defaulted second loan for ff&e and a concern that future assessments will remain unpaid, the use of a limited purpose receivership may be more appropriate. The cost advantage here is significant provided the party petitioning for a court receiver to be appointed can get the debtor View from Resortand any other interested third parties, say the landlord of a leased hotel, to agree. Typically, in a limited purpose hotel receivership where there are sales taxes to be paid, the fees incurred would only be for the administration and accounting of the portion of income set aside to satisfy the judgement and any ongoing taxes incurred. This type of action can also be used to take control of the deposit receipts to payoff a secondary financing lender or business investment partner who advanced capital. In both cases, the court appointed hotel receiver has limited duties specific to the judgement and no interim hotel management services are required, since the owner or operator stays in place to manage the day-to-day operations. Often, the administration and accounting can be performed by a junior member at a lower hourly rate than more senior hotel receivership services staff. The other cost benefits are reduced travel expenses and no outside accountant expenses. However, for a limited purpose hotel receivership to cost less, it is critical that a court appointed hotel receiver can function and handle its duties without the need to contract interim hotel management. This requires complete cooperation between the owner, operator and any interested third parties.
Perry Group
Hotel & Restaurant Experts For The Hospitality Industry
