Hospitality Litigation

Through our in-depth experience in the hospitality industry, Foley’s Litigation attorneys are able to provide you with perspective and proactive, strategic counsel on the challenges and vulnerabilities your business faces.

From franchise matters to consumer complaints, the hotel and timeshare industry has unique litigation risks. Our Hospitality Litigation team has deep experience in all facets of disputes that your company may face, including:

  • Timeshare Act claims 
  • State advertising, referral selling, prize notice, and misrepresentation claims 
  • Telephone Consumer Protection Act (TCPA) compliance 
  • Debt collection compliance 
  • Franchise disputes, including franchisee termination and non-competes 
  • Trademark violation and infringement 
  • Labor and employment matters 
  • Purchase and sale transactions 
  • Vendor disputes 
  • Construction litigation 
  • Vicarious liability claims, including personal injury

We know that you are not well served if your legal counsel simply reacts to disputes as they arise. Our multidisciplinary team uses the experience it has gained in litigating countless hospitality matters to train clients’ staff and sales forces on how to comply with consumer laws, regulations, and debt collection practices to reduce litigation risks before disputes arise.

When our hospitality clients face repetitive claims, we know it is our job to investigate the root cause and eliminate it. Recently, for example, through effective litigation defense coupled with recommendations on business practices, we were able to reduce recurrent TCPA, debt collection, and consumer claims against a client by more than 90 percent.

With our vast geographic reach, Foley’s Hospitality Litigation team is ready to put its industry knowledge and proven proactive strategies to work for your business wherever you need it.

Representative Matters

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Represented Hall Equities Group (HEG) in connection with the acquisition of 29 hotels and the corporate assets of ZMC Hotels, which employs more than 1,000 people. The aggregate purchase price was approximately $225,226,000. ZMC Hotels owns and operates both private label boutique hotels, as well as those licensed by many prominent brands, including Hilton, Marriott, IHG, Wyndham, and others. Hotels are disbursed across the country from Duluth, Minnesota, to Phoenix, Arizona, to Sebring, Florida, and many locations in between. Five hotels are clustered in Scottsdale, Arizona. All of the hotels, along with other select quality properties, were master leased to and are being managed by Zenith Asset Company, an affiliate of HEG. Equity financing for the transaction was derived from a variety of sources, including the sale of three quality properties by the Hall Equities Group sponsored investment groups, cash on hand, and the refinancing of two multi-family apartment buildings. As part of the equity raise, one of HEG's investment groups sold a shopping center to Excel Trust, Inc. This shopping center was originally developed by HEG and owned since 2000. The aggregate purchase price was approximately $131,000,000. This super-regional center is known as Monte Vista Crossings and is located in Turlock, California. Monte Vista Crossings is one of the largest open-air regional shopping centers in the western United States, and is home to national retailers such as Home Depot, Target, Kohl’s, Lowe’s, Safeway, Dick’s Sporting Goods, Ross Dress for Less, Bed Bath & Beyond, T.J. Maxx, Old Navy, Office Max, Petco, In-Shape Fitness, Gap, Pier One Imports, and more than fifty additional well known shops and restaurants. The seller retained HEG to handle the ongoing leasing and construction of the next phase of Monte Vista Crossings. Another HEG sponsored investment group sold a luxury apartment project in downtown Walnut Creek, California. This six-story, 100-unit Class “A” building of concrete construction is known as The Arroyo. The project was sold to a major US-based Life Insurance Company, which has retained HEG as both the General Contractor to complete construction of the project, and as the Property Manager for the project going forward. An additional HEG sponsored investment group sold the 41,000 square foot 2890 North Main Street office building in Walnut Creek. Proceeds from all three sales were used by the investor groups to generate equity capital for the hotel portfolio acquisition. The balance of the proceeds were derived from an acquisition loan from Bank of America.
Foley represented the Debtor in a bankruptcy involving the Cordillera Golf Club (Cordillera). Located in Edwards, Colorado (in the renowned Vail Valley), Cordillera consists of three “Championship” 18-hole golf courses and one short course. The Chapter 11 Reorganization by Cordillera involved a “363 sale” and an affiliate of the Debtor acquired the property through a competitive bid process. Section 363 of the Bankruptcy Code provides a useful tool for distressed companies seeking to sell their assets and for buyers looking to purchase assets at potentially bargain prices. These types of sales, commonly referred to as “363 Sales,” are viewed as more efficient. The complexity and challenge of this matter was twofold. First, in the months leading up to the bankruptcy, the debtor had become embroiled in law suits involving members of the club, property owners and others, with alleged damages in excess of $100 million. Our focus was to ward off the law suits and guide our client, the debtor, through the bankruptcy and ultimately the settlement process by which the unsecured liabilities of the debtor would be extinguished. This discharge was a material factor in enabling the debtor to emerge successfully from the bankruptcy. Second, the proceeding involved contentions, political and highly emotional negotiations. This required Foley to exercise diplomacy and negotiation skills in order to achieve our clients’ desired result in a the hostile atmosphere. Throughout the matter, Foley showcased its technical capabilities in all facets of the law, and accomplished it all on an aggressive timeline. Typically a matter involving bankruptcies of such a complex nature can go on for years, but through our efficiency and knowledge of the industry, the timeline was compressed to less than six months, commencing in June 2012 and ending with sale of the golf course in December 2012. This was advantageous to all parties because the golf course and interested parties were back in business for the Spring of 2013. As a result, this was one of the largest and most complex bankruptcies involving a golf course and Foley lawyers substantially achieved all of the desired results for our client through our understanding of sports, but more specifically of the golf industry as it relates to financing, bankruptcy, tournaments and sponsorships.
Litigation, arbitration and related appeals amongst various participants in the development, construction and management of The Ritz-Carlton Club and Residences, Kapalua Bay. We represent the Marriott/Ritz entities. One aspect involved a successful petition to the US District Court in Hawaii to compel arbitration under the Federal Arbitration Act after the state court stayed arbitration.