U.S. Bankruptcy Tracker: Hotel Filings Rise Amid Virus Spike
Stephen Selbst, partner and co-chair of Herrick's Restructuring & Finance Litigation Department, was quoted in Bloomberg in an article discussing the rise of hotel bankruptcy filings amid the resurgence of COVID-19 infections throughout the U.S.
"Lenders have been reluctant to foreclose on struggling hotels since the pandemic crushed revenues," according to Stephen. "If you take back a hotel, you’re the mortgagee, and now all of a sudden it’s your responsibility to keep the lights on,” he added. “That’s like foreclosing on a horse. You have to feed the horse."
Still, it's "a little surprising” there weren’t more hotel bankruptcies last year, Stephen said. "Clearly the pace of workouts in hospitality is going to increase in 2021; whether that’ll translate to bankruptcies is less obvious."