These are tough times in the hotel business. The recession has squeezed room rates and net operating income. The credit crunch means new borrowing is available only at lower loan to value ratios near 50%, on already beaten down values. At the same time, many tens of billions of dollars of existing hotel loans are maturing or otherwise in default, leaving the owners with little ability to sell or refinance at for amounts sufficient to pay off existing debt.

Appointment of a receiver is a flexible remedy for solving serious business problems in distressed projects while reducing delay and risk. A receivership can provide (in addition to reliable management of a property approaching foreclosure) court supervision and certainty without the delay and expense of bankruptcy.