Articles Posted in Workouts, Bankruptcies & Receiverships

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This was first published in IFLR on July 21, 2025. 

Summertime blues: corporate finance faces a financial reporting reckoning

By Marianne Martin and Bennett Young

Borrowers and lenders can plan ahead of the curve amid financial pressures

Summer is just at the half-way point, but financial reporting for many borrowers for second quarter is still around the corner. Given market volatility, tariffs and other financial burdens – initial indicators suggest that companies are likely straining if not flailing under the weight of economic conditions. What this means for borrowers and lenders is that second quarter reporting could be underwhelming, if not disastrous – putting multiple borrowers in default under their loans.

Below is a look at some of the key market indicators likely to be strained when second quarter reports are available, and what borrowers and lenders alike can do to avoid or reduce the damage.

  • EBITDA ills– The past few months have seen a topsy-turvy effect in the markets due to a number of factors. War, tariffs, inflation and now even immigration effects have put a tremendous strain on companies’ bottom lines, and we predict that earnings-based covenants, such as leverage tests hinged on EBITDA (or earnings before interest, taxes, depreciation and amortisation, a concept often defined differently per borrower) will be the first indicator that trouble is brewing. Even companies that have additional availability on their existing lines may find reduced EBITDA restricts their borrowing capacity and growth, and reductions in EBITDA can cause increases in interest margins in some credits.
  • Asset tests dip – Inventory strains, given logistical issues caused by tariffs and other disruptions, may harken concerns – but these same economic pressures are being felt by borrowers’ account debtors as well. This is likely to have a diminishing effect on the valuation and validity of accounts and other assets used in asset-based financial covenants (such as borrowing base measurements and loan to value, current ratio or liquidity/net worth covenants). The same impact will be felt more broadly in specific industries as certain asset classes, real estate as an example, continue to meander in their recovery – putting borrowers in a deficit from which they simply cannot recover.
  • Coverage tests shorten – Financial coverage tests (such as fixed-charge and interest coverage ratios), which reflect how far cash flow can cover costs, such as interest and other debt costs, are beginning to tighten for many companies. As overall business costs consume cash and thin out liquidity, a company’s ability to cover debt costs will be constrained. These cash flow strains are often viewed by lenders as a window to a company’s financial health – and a failure to maintain sufficient coverage can be seen as irreversible and fatal in the eyes of a lender, handicapping a borrower’s ability to get back to better health.

For lenders, there are steps that can be taken now to anticipate soft or poor upcoming financial results, and to be proactive with respect to any concerns. CONTINUE READING →

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18 January 2022

“Practice Group of the Year” awarded to
JMBM’s Global Hospitality Group
by Law360

Jeffer Mangels Butler & Mitchell LLP (JMBM) is proud to announce that the Global Hospitality Group® (GHG) has been selected as one of Law360’s Practice Groups of the Year. This award “honors the practices behind the litigation wins and major deals that resonated throughout the legal industry in 2021” and winners are chosen out of hundreds of submissions. The recognition is a result of the unsurpassed experience of the GHG team members who, for the past 30 years, have helped clients with more than 4,500 hospitality properties, valued at more than $112 billion.

Some notable accomplishments by members of the GHG in 2021 include:

  • Workout, recapitalization, and repositioning of a $1 billion mixed-use lifestyle hotel project
  • Sale of an NYSE-traded hotel REIT’s entire portfolio of 15 upscale, select-service hotels for $305 million
  • Closing more than $210 million in Commercial Property Assessed Clean Energy loans (C-PACE)
  • Assisting clients with hotel management and franchise agreements for properties worth more than $1.5 billion
  • Serving as primary counsel for lenders on more than $2.2 billion in the distressed hotel, retail, and office loans during the global pandemic, including over $500 million for a single client

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16 November 2021

LOS ANGELES—The Global Hospitality Group® (GHG) of Jeffer Mangels Butler & Mitchell LLP (JMBM) has released an updated version of its Hospitality Credentials, detailing unsurpassed experience by providing representative clients and properties the GHG has worked on over the past 30 years. These Credentials show how the GHG has helped clients with more than 4,500 hospitality properties, valued at more than $112 billion.

Some notable accomplishments by members of the GHG over the last 12 months include:

  • Workout, recapitalization and repositioning of a $1 billion mixed-use lifestyle hotel project
  • Sale of a NYSE-traded hotel REIT’s entire portfolio of 15 upscale, select service hotels for $305 million
  • Closing more than $210 million in Commercial Property Assessed Clean Energy loans (C-PACE)
  • Assisting clients with hotel management and franchise agreements for properties worth more than $1.5 billion
  • Serving as primary counsel for lenders on more than $2.2 billion in distressed hotel, retail and office loans during the global pandemic, including over $500 million for a single client

CONTINUE READING →

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2 November 2021

And click here for the latest blog articles on loan modifications, workouts, bankruptcies and receiverships, and here for The Lenders Handbook for Troubled Hotels.

Join JMBM’s Global Hospitality Group® at Fishing for Solutions 2021 

The Global Hospitality Group® is pleased to sponsor and participate in Fishing for Solutions, the conference dedicated to servicing defaulted hotel loans hosted by Prism Hotels & Resorts. This is the conference’s 16th year.

Guy Maisnik, Partner and Vice Chair of the Global Hospitality Group®, will moderate a session for the program titled “Hotel Receiverships / Receivership Sales” alongside a panel of experts on November 4 at 1:15pm.

Fishing for Solutions is an educational seminar and social gathering strictly limited to Special Servicers, Bank Special Asset Specialists, Debt Fund Asset Managers and Life Company Loan Asset Managers. Conference attendance is complimentary.

You can learn more and register here.

Panel Lineup for “Hotel Receiverships / Receivership Sales”

  • Guy Maisnik (Moderator) is a Partner and Vice Chair of the JMBM Global Hospitality Group. Guy has over four decades of commercial real estate transactions with a strong expertise in hotels and finance.
  • Chris Chauvin (Panelist) is a partner at Holland & Knight. Chris represents clients before federal and state trial and appellate courts. He focuses his practice on litigation, arbitration and counseling on matters involving real estate, including real estate capital markets, with an emphasis on special servicers in the commercial mortgage-backed security market.
  • Jim McGee (Panelist) is an Attorney at Munsch Hardt. Jim’s practice focuses on commercial litigation including a concentration on representation of state court and federal equity receivers, director and officer litigation, financial services representation, lender liability defense and creditors’ rights. Jim has substantial experience representing both State and Federal receivers appointed in securities fraud cases. He has more than 15 years of experience in representing financial institutions consisting of commercial mortgage lenders and servicers, national banks and insurance companies.
  • John Bailey (Panelist) is the Chief Financial Officer of Prism Hotels & Resorts. As Prism’s CFO, John leads the financial management functions of Prism’s management and investment business, including risk management, legal, and receivership administration. His professional responsibilities also include supporting Prism’s new business development team, serving as court appointed restructuring officer for high profile bankruptcies, and chairing Prism’s investment committee.

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19 February 2021

Click here for the latest articles on Hotel Finance.

The Global Hospitality Group® just hosted a very timely webinar discussing the state of the hotel and CMBS industries. Our program featured senior representatives from Argentic, Greystone, and Situs – three of the largest CMBS special servicers with the most distressed hotel debt – as well as leading data and analytics firm Trepp, HREC’s runway capital program, Manhattan Hospitality for hotel industry perspectives, and our own hospitality workouts and receivership expert to break down the current state of the distressed hotels market and CMBS special servicing.

Two of our panelists, Jack Westergom of Manhattan Hospitality Advisors and Manus Clancy of analytics firm Trepp, presented slides packed with useful information, and we wanted to make them available to those who were not able to attend the program. Jack’s update on the state of hotel industry, and Manus’ state of the CMBS industry presentation are both available for download below.

CONTINUE READING →