What The Hospitality Industry Needs To Know About Chapter 11
There are many hotels and motels, as well as others in the hospitality industry that are dealing with too many expenses and not enough business to meet financial demands. Many people are putting vacations on hold out of worry over the uncertain economy or the loss of their job. For businesses that are struggling to stay afloat and are no longer able to meet their financial obligations, Chapter 11 bankruptcy can provide a significant means of assistance. A hotel can file for Chapter 11 and restructure its debts. For those that choose to file for Chapter 11, this is a form of bankruptcy that can be used by hotels looking to restructure their debts and make it through this tough time.
The Benefits Of Chapter 11 Bankruptcy
There are many benefits to filing Chapter 11. When considered a “debtor in possession,” the business is still able to operate. The owner can remain in full control of its “destiny.” Chapter 11 will also allow for a business to restructure its finances, strip liens, reduce interest rates and extend maturity dates so that its ongoing payments are reduced and repaid in a more feasible amount, with the terms of its payments modified. It may also be more profitable for the business to downsize to make it through this obstacle. Assets can be sold through this type of bankruptcy, through an orderly liquidation. When restructuring the company, it may be necessary to “downsize” in an effort to come out ahead at the end of the process. Some hotel owners have also found that the economy is not strong enough to support their business, nor is it worth the stress, and through Chapter 11, they can seek liquidation and move onto the next phase with as little debt as possible.
Who Is Eligible To File?
Unlike Chapter 7 bankruptcy, no means test is required to be eligible to file. Individuals are able to file through Chapter 11, but it is often used by businesses as well. A corporation, partnership or sole proprietorship can reorganize if the company is no longer profiting or they are dealing with costs that outweigh their income. It is important to have the financials analyzed by a professional who can better determine if reorganization is the best option. If a bankruptcy filing is not handled correctly, it can potentially decrease the level of benefits and even potentially harm the business.
Our Tampa bankruptcy attorneys have a firm grasp on these cases and know what to assess for. They can not only determine which type of bankruptcy is the best choice but also help with filing and developing a plan to optimize the results. The Law Offices of Buddy D. Ford, P.A., has successfully represented more than 85 hotels and motels and dozens of restaurants in reorganization, including widely recognized companies. Our lawyers are able to negotiate the terms with lenders, develop the restructuring and allow for their clients’ businesses to prosper through this difficult time. Since 1987, the firm has been committed to representing clients with dignity and finding the best possible solution.
How Can The Law Offices of Buddy D. Ford, P.A., Help?
In these uncertain economic times, travel is a luxury that has been cut out of many household budgets as disposable income has evaporated; many opt instead for “staycations” and day trips. The hotel/motel hospitality industry has felt the brunt of the downturn. Even with recent improvements in the economy, the rebound effect is likely to hit the hospitality industry very slowly over the coming years.
Law Offices of Buddy D. Ford, P.A., was introduced to this niche market in 2010. The firm has had outstanding success in negotiating terms with lenders and reorganizing the debt of hotels/motels through Chapter 11 bankruptcy, allowing them to survive and flourish. The mutual respect and working relationship between Law Offices of Buddy D. Ford, P.A., and creditors’ counsel permit strong discussion and resolution of terms.
In some instances, the businesses did not wish to continue operating due to the insurmountable financial burden and stress of the industry. Law Offices of Buddy D. Ford, P.A., has guided such entities through liquidating Chapter 11 bankruptcy, with a strong exit strategy. Some creditors have even agreed to not pursue personal loan guarantees against the principals.
The Law Offices of Buddy D. Ford, P.A., represents over 50 hotels/motels, including:
- Comfort Inn & Suites of Jacksonville, Florida
- Holiday Inn & Suites of Sebring, Florida
- Hampton Inn of Jacksonville, Florida
- Four Points By Sheraton in Jacksonville, Florida
- Budget Inn of Bradenton, Florida
- Holiday Inn Express of Brooksville, Florida
- Holiday Inn of Jacksonville, Florida
- Candlewood Suites of Jacksonville, Florida
- Royal Inn of Lake Wales, Florida
- Quality Inn of Davenport, Florida
- Holiday Inn Express of Tavares, Florida
- Days Inn of St. Augustine, Florida
- Holiday Inn Express in Perry, Florida
- Country Inn & Suites of St. Augustine, Florida
- Super 8 Motel of St. Augustine, Florida
- Baymont Suites of St. Augustine, Florida
- Microtel & Suites, Jacksonville, Florida
- Comfort Suites of Palm Bay, Florida
- Best Western of Mayport, Florida
- Red Roof Inn of Kissimmee, Florida
- America’s Best Value Inn of Clearwater, Florida
- Gulf Towers Resort Motel of Indian Rocks Beach, Florida
- Jefferson Motel of Treasure Island, Florida
- Best Western Plus of Kingsland, Georgia
- Howard Johnson of New Port Richey, Florida
- Hampton Inn of West Melbourne, Florida
- Royal Inn & Suites of Sanford, Florida
- Holiday Inn Express of Jacksonville Beach, Florida
- Lake Tarpon Resort
- Holiday Inn Express of Port St. Lucie, Florida
- Holiday Inn Express of Port Richey, Florida
- Comfort Inn of Orange Park, Florida
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