Hotel Industry Braces for Bankruptcies Amid Uneven Pandemic Recovery

November 29, 2021Media Mention
Los Angeles Business Journal

Bankruptcy, Reorganization & Capital Recovery Chair, Brian Davidoff, shared his perspective regarding the hospitality industry beginning to face the realm of bankruptcy as COVID-19 related federal support begins to decline and occupancy is still below normal levels. Brian believes that lenders becoming more aggressive with underperforming assets has the potential to trigger an increase in bankruptcies. 


“Currently, banks and lenders don’t need to do what’s called a TDR, a troubled debt restructuring, for a Covid impairment,” Davidoff said.

“(Typically) the lender would be obligated to write down the asset to the extent of the impairment on their books. So there hasn’t been financial pressure on the lenders to deal with assets as they otherwise would have.”

“It’s not even getting back up to full occupancy that would make this up,” Davidoff said. “You can’t make that up after a year of nonpayment.”

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