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Hospitality Update – Considerations for Preparing for and Responding to the Coronavirus


Morris, Manning & Martin, LLP has assembled a multi-disciplinary working group of attorneys who are ready and available to assist and advise you and your organization on a broad range of business and legal implications of the spreading novel coronavirius disease 2019 (COVID-19). Our Hospitality practice is monitoring, in particular, the impact of coronavirus on hospitality businesses. Our attorneys can give insight and guidance to clients facing immediate challenges and answer many questions related to the threat posed by the coronavirus.

The impact of coronavirus may affect the ability to satisfy covenants in loan documents, such as material adverse change notifications, meeting debt service obligations, or satisfying DSCR, debt yield, and other financial covenants. It may also impact meeting franchise agreement obligations, particularly regarding hotel projects that are under construction or renovation, and hotel management agreement performance termination tests. The MMM Hospitality team can review your agreements, their covenants and force majeure and similar clauses as well as any requirements for material adverse change notifications, and, if needed, initiate or assist in discussions with lenders, franchisors, owners and managers regarding arrangements to alleviate the effects of ongoing business disruption.

Our Construction attorneys are available to advise on potential issues and probable delays that may arise during the course of construction. The team is prepared to review your construction contracts to help you determine your rights vis-à-vis contractors and other stakeholders in your ongoing projects. 

In addition, our Employment & Benefits practice is actively consulting and providing guidance on appropriate employment and benefits strategies in response to current challenges. The team has prepared an advisory to assist employers with best practices and recommendations. 

Should the need arise, our team is prepared to work with you to navigate this unprecedented situation. Please reach out to our Hospitality partners if we can help.