Subsequent Events

3 Months Ended

Mar. 31, 2020

Subsequent Events

Subsequent Events

12. Subsequent Events

In response to the COVID-19 pandemic, the Company temporarily suspended operations at the following hotels during April 2020, bringing the total number of suspended hotels to 14:

Hotel	Suspension Date
Embassy Suites Chicago	April 1, 2020
Renaissance Westchester	April 4, 2020
Hyatt Centric Chicago Magnificent Mile	April 6, 2020

The Company is unable to predict when any of its hotels with temporarily suspended operations will resume their operations. While the Company is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business, the situation is rapidly evolving and the Company cannot predict how long the COVID-19 pandemic will last or what the long term impact will be on the Company’s hotel operations. As a result, the Company has experienced and continues to experience a significant negative impact on its liquidity, and could experience additional material impacts including, but not limited to, charges from potential adjustments of the

carrying amount of receivables and additional asset impairment charges. The Company anticipates this will have a material impact on its business, results of operations and cash flows in 2020.

Due to COVID-19’s continued negative impact on the Company’s business throughout 2020 and possibly longer, the Company anticipates it may not meet the terms of its unsecured debt financial covenants during either the second or third quarter of 2020. The Company is currently working with its lenders and expects to obtain waivers of its covenants through the end of the first quarter of 2021. There can be no assurance that the Company will be able to obtain waivers in a timely manner, or on acceptable terms. If the Company is unable to obtain waivers on its covenants and does not meet its covenants, the lenders on the Company’s line of credit, unsecured term loans and unsecured senior notes may require the Company to repay the loans.

 The Hilton Times Square ground leases require monthly rental payments be paid to the respective landlords. The Company did not make its April 2020 rent payment, but received a deferral for such payment until October 2020. Likewise, the Company did not make its May 2020 rent payment. The Company has not yet received, and is uncertain if it will receive, a deferral for its May 2020 rent payment. Additionally, the Company has not made its May 2020 debt payment for the hotel.