Hotel Operators Open Pandora’s Box: From “Agent” to “Fiduciary” & Beyond

  • October 24, 2000
  • • Written by: Jim Butler Jeff Riffer

Fall 2000, Vol 25, No 3

Abstract: Woodley Road represents a dramatic change for the hospitality industry. In addition to exposing almost every operator to paying big damages to hotel owners, the case could also give owners a free termination right for long-term management agreements or powerful currency to renegotiate existing agreements. Indeed, the case has provided a wake-up call for owners and operators to understand the fiduciary duties that almost every operator owes to the hotel owner, as well as sent a similar signal to all asset managers, pension advisors, and other third-party fiduciaries charged with overseeing the effectiveness of hotel operators on behalf of their investors.