Brewer Partner Cecelia L. Fanelli Earns 2023 Chambers Recognition

June 1, 2023 – Brewer, Attorneys & Counselors Partner Cecelia L. Fanelli was recently recognized by Chambers and Partners in the 2023 Chambers USA legal directory. 

Chambers USA is a leading directory that ranks top lawyers and law firms across the country. A partner in the firm’s New York office, Ms. Fanelli was recognized in the Leisure & Hospitality nationwide category. She has been ranked by Chambers USA in this area since 2011.

Her practice involves a variety of complex commercial litigation matters, with an emphasis on matters relating to the hotel and real estate industries. Ms. Fanelli frequently writes and lectures on issues regarding hospitality law, and is a featured presenter at the 45th Annual NYU International Hospitality Industry Investment Conference, scheduled for June 2023.

Chambers ranks lawyers based research findings, peer recognition and client interviews. Chambers assesses the information gathered based on factors such as technical legal ability, client service and diligence. Individual lawyers are ranked by practice area based on their legal knowledge and experience, their ability, their effectiveness and their client service.

Ms. Fanelli has decades of experience in litigation and dispute resolution, practicing across the country in federal and state trial and appellate courts.

Brewer Partner Cecelia L. Fanelli to Present at NYU Hospitality Conference

May 23, 2023 – The Brewer firm announced today that partner Cecelia L. Fanelli is a featured presenter at the 45th annual NYU Hospitality Industry Investment Conference. Fanelli will moderate the panel, “Soft Brands:  Hard Work,” at 4:05 p.m. EST on Monday, June 5, 2023.

Fanelli’s practice involves a variety of complex commercial litigation matters, with an emphasis on matters relating to the hotel and real estate industries. Her clients run the gamut from owners of hotels to lenders, franchises, franchisors, asset managers, and management companies.

Fanelli will be joined on the panel by Catie Cramer, vice president, Luxury, Lifestyle & Premium Brands, IHG Hotels & Resorts; Jenna Hackett, global brand leader, Canopy by Hilton & Curio and Tapestry Collections by Hilton; and Dan Thorman, senior vice president, Development-Full Service, Eastern U.S., Canada, and Caribbean, Aimbridge Hospitality.

The conference is being held June 4 – 6, 2023, at the New York Marriott Marquis, located at 1535 Broadway at 45th Street, New York, NY. Visit here (below) to learn more and register for the event.

45th Annual NYU Hospitality Industry Investment Conference

Law360: NY Appellate Court Reverses Times Square Hotel Ruling

December 6, 2022 – Law360 reports that Brewer client M&C New York LLC, owner of the former Novotel Times Square Hotel, has prevailed in its appeal of a lower court ruling that dismissed a breach of contract lawsuit against the hotel's former manager, hotel operator Accor Management US Inc. 

According to the report, "The appellate court favored hotel owner M&C New York (Times Square) LLC's argument that it had complied with the provisions of its hotel management agreement with operator Accor Management US Inc. when it issued an April 2019 notice of default due to the manager's alleged negligent accounting, misuse of hotel funds, unsupported payments and fee overcharges. The appeals court also rejected Accor's claims that it was protected by a safe harbor provision in section 14.3 of the hotel management agreement." 

Counsel for M&C New York, William A. Brewer III, told Law360 the decision paves the way for a trial, which is expected to shed light on Accor's management of the former Novotel Times Square. 

“This case underscores the principles that govern the relationship between owners and management companies,” says Brewer. “Our client believes Accor sought protections to which it was not entitled – and failed in its obligations to manage the property in owner’s best interest. This case is a cautionary tale for owners throughout the Accor system, and we are eager to proceed to trial.”

Read the report (subscription required). 

San Francisco Business Times Reports on Virgin Hotels Case Proceeding to Trial

On January 26, 2022, the San Francisco Business Times reported that a San Francisco Superior Court judge denied Virgin Hotels’ request to rule on some of its allegations against the owner of the former Virgin Hotels San Francisco, clearing the way for the case to go to trial.

The reporting also observes that the Virgin Hotels brand, launched with great expectations, is only affiliated with five properties.

The article reported that Virgin was suing and being sued by the property owner, which had terminated the hotel management agreement with Virgin in April 2020.

“In our clients’ view, this prized hotel asset fell victim to false promises, fraud and mismanagement,” said William Brewer III, a partner at Brewer, Attorneys & Counselors who represents the hotel owner in the case, clients 250 Fourth Development L.P., Paradigm Hotels Group, LLC, et al., in an emailed statement. “They believe that not only has Virgin Hotels failed to deliver on the ‘brand’ it promised, it mismanaged the San Francisco property in an effort to boost its own bottom line. Our clients look forward to this trial.”

The Business Times reports that in an amended cross complaint filed in August 2020, the owner accused Virgin of breach of contract and fraud, and alleged that Virgin overstated gross hotel revenue to inflate its management fee and misrepresented bonus amounts due to employees. The owner claimed it lost tens of millions of dollars in unrealized hotel profits and lost value of the property.

To read more, click here.

Brewer Client Prevails in Key Round of Legal Dispute with Virgin Hotels, Lawsuit Proceeds to Trial Next Month

January 24, 2022 – Brewer, Attorneys & Counselors announced that its clients, 250 Fourth Development L.P., Paradigm Hotels Group, LLC, et al. (“Hotel Owner”), prevailed in a key round of its closely-watched dispute with Virgin Hotels San Francisco (“Virgin Hotels”) – paving the way for trial.

In a decision, dated January 21, 2022, the Superior Court of the State of California, County of San Francisco, denied Virgin Hotels’ plea to escape trial on the Hotel Owner’s claims of breach of fiduciary duties by Virgin Hotels. The brand had argued, as to its own complaint, that there existed no triable issue of material fact pertaining to Hotel Owner’s duties under the Hotel Management Agreement (“HMA”) related to the termination provisions. Specifically, the brand argued that Hotel Owner’s only method for termination was to be found with the HMA and that Hotel Owner did not comply.

The Court agreed with the Hotel Owner that contrary to the brand’s arguments, there was evidence sufficient for a jury to conclude that various provisions of the HMA were waived by the parties during the business relationship. Specifically, the Court held that there is a triable issue of material fact concerning Hotel Owner’s allegations that the brand waived all termination related provisions, including a provision Virgin Hotels argued required written notice of termination, rather than notices sent in electronic format. The Court denied Virgin Hotels’ motion and held that the brand did not submit sufficient evidence to disprove the claims and that it failed to meet its evidentiary burden. This ruling sets the stage for trial proceedings to begin on February 7, 2022. 

It has been well chronicled that the Virgin brand is struggling to establish its promised national hotel brand, with properties open in only five locations. In 2010, the brand announced plans to operate up to 25 hotels within seven years. The Hotel Owner’s San Francisco property opened with great fanfare in 2019 under the Virgin name, but currently remains closed.

“In our clients’ view, this prized hotel asset fell victim to false promises, fraud and mismanagement,” says William A. Brewer III, partner at Brewer and counsel to 250 Fourth Development, L.P. “They believe that not only has Virgin Hotels failed to deliver on the ‘brand’ it promised, it mismanaged the San Francisco property in an effort to boost its own bottom line. Our clients look forward to this trial.”

The underlying legal dispute began on May 6, 2020, when Virgin Hotels filed a lawsuit alleging the Hotel Owner’s termination of the HMA on April 8, 2020, violated that agreement. On July 16, 2020, the Hotel Owner filed its Original Cross-Complaint in the Superior Court of the State of California, County of San Francisco. A month later, on August 19, 2020, the Hotel Owner filed its First Amended Cross-Complaint, alleging that Virgin Hotels made misrepresentations to Hotel Owner by, among other things, knowingly overstating Hotel gross revenues to inflate its management fee and misrepresenting bonus amounts due to Hotel employees. As a result, the Hotel Owner claims the loss of tens of millions of dollars in unrealized hotel profits and the lost value of the property.

In total, the Hotel Owner asserts five causes of action against Virgin Hotels, including breach of contract and fraud. Virgin Hotels demurred, or moved to dismiss, the claims. On October 30, 2020, the court entered an order overruling the demurer in its entirety, vindicating each and every one of the Hotel Owner’s claims. In so doing, the court noted that the First Amended Cross-Complaint “adequately pleads constructive fraud.”

In November 2021, the court overruled Virgin Hotels’ attempts to avoid having to face Hotel Owner’s claims against Virgin Hotels for damages done to the project before the Hotel Owner terminated the management agreement. The court also denied Virgin Hotels’ efforts to freeze more than $2 million of Hotel Owner’s property. After failing to obtain dismissal of Hotel Owner’s claims, Virgin Hotels filed an application for a writ of attachment on Hotel Owner’s property – to secure what Virgin Hotels claimed was over $2 million in expenses that Virgin Hotels had either paid or was owed to third parties. The court denied this request in its entirety.

San Francisco Hotel Owner Scores Early Wins Against Virgin Hotels, Lawsuit Proceeds to Trial

November 25, 2020 – Brewer, Attorneys & Counselors today announced two positive developments for its client, 250 Fourth Development L.P. (“Hotel Owner”), in its dispute with Virgin Hotels San Francisco (“Virgin Hotels”). In sum, the court issued two important decisions. First, the court overruled Virgin Hotels’ attempts to avoid having to face Hotel Owner’s claims against Virgin Hotels for damages done to the project before Owner terminated the management agreement. Second, on November 20, 2020, the court denied Virgin Hotels’ efforts to freeze more than $2 million of Hotel Owner’s property. The case now proceeds toward trial.

The underlying legal dispute began on May 6, 2020, when Virgin Hotels filed a lawsuit alleging the Hotel Owner’s termination of the Hotel Management Agreement (“HMA”) on April 8, 2020, violated that agreement. On July 16, 2020, the Hotel Owner filed its Original Cross-Complaint in the Superior Court of the State of California, County of San Francisco. A month later, on August 19, 2020, the Hotel Owner filed its First Amended Cross-Complaint, alleging that Virgin Hotels made numerous misrepresentations to Hotel Owner by, among other things, knowingly overstating Hotel gross revenues to inflate its management fee and misrepresenting bonus amounts due to Hotel employees. As a result of the alleged fraud and mismanagement, the Hotel Owner claims the loss of tens of millions of dollars in unrealized hotel profits and the lost value of the property.

In total, the Hotel Owner asserts five causes of action against Virgin Hotels, including breach of contract and fraud. Virgin Hotels demurred, or moved to dismiss, the claims. On October 30, 2020, the court entered an order overruling the demurer in its entirety, vindicating each and every one of the Hotel Owner’s claims. In so doing, the court noted that the First Amended Cross-Complaint “adequately pleads constructive fraud.”

“Our client is grateful that this case is moving forward and is eager to proceed to trial,” said William A. Brewer III, partner at Brewer and counsel to 250 Fourth Development, L.P. “For years, our client put faith in Virgin and its assurances that it was creating a first-class brand. Our client believes that not only has Virgin failed to create the ‘promised brand,’ it grossly mismanaged the San Francisco property in an effort to boost Virgin Hotels’ own bottom line.”

After failing to obtain dismissal of Hotel Owner’s claims, Virgin Hotels filed an application for a writ of attachment on Hotel Owner’s property – to secure what Virgin Hotels claimed was over $2 million in expenses that Virgin Hotels had either paid or was owed to third parties. On November 20, 2020, the court denied this request in its entirety.

News Release: Brewer, Attorneys & Counselors Names Cecelia L. Fanelli Partner and Expands Hospitality Practice

New York, NY… September 9, 2020 – Brewer, Attorneys & Counselors announced the addition of veteran hospitality attorney Cecelia L. Fanelli as a Partner in the firm’s New York office.    

Fanelli is recognized as a leader in her field – achieving successful outcomes in some of the world’s most prominent hospitality cases. 

“Cecelia’s considerable experience and winning track record are a huge asset for our clients in the hospitality sector and beyond,” said firm partner William A. Brewer III. “We are pleased to welcome her to our firm – and eager to continue the growth and expansion of our hospitality practice group.”    

“This is an exciting time to join the Brewer firm – as it helps a growing roster of hospitality clients navigate unprecedented legal and business challenges,” Fanelli said. “The Brewer firm shares in my commitment to be at the leading edge of advocacy for owners, managers, and investors.”  

Fanelli has served as an arbitrator in high stakes matters, particularly in the hotel industry. Since 2011, Chambers USA has ranked her in the Leisure & Hospitality, Nationwide category.    

Her clients previously have included hotel owners, lenders, franchisees, franchisors, asset managers and management companies. Her successes include obtaining several multimillion-dollar recoveries in hotel industry and real estate litigation.    

Additionally, Fanelli is active in transactions relating to hotel assets, including the negotiation and drafting of management agreements.   

Fanelli has been named a Dean’s Distinguished Lecturer at the Cornell Hotel School. Fanelli received her Juris Doctor degree from Cornell Law School and a bachelor’s degree from the University of Pennsylvania. She was previously a Member at Eckert Seamans. 

Cecelia L. Fanelli

Partner

William Brewer Writes About the Responsibilities of Hotel Owners and Management Companies for Hotel Business Review

Managing Partner William Brewer wrote an article for Hotel Business Review published on July 26, 2020, titled “History Lesson: Owners and Management Companies Weigh Responsibilities and Risks in Response to COVID-19.”  

In part, Brewer writes: “Today, the chain brand hotel companies (e.g., Marriott, Hilton, IHG, etc.) represent 69% of the rooms in supply. They do so through a variety of brands, spread over different price strata, offering different levels of facilities and services to their guests. Although the traveling public may not realize it, the brands rarely own any of the hotels within their 'chain' of distribution. Rather, the owner of the hotel is either a licensee or the principal who has contracted for the asset to be managed by the brand. This was not always so.” 

Amidst the coronavirus pandemic, Brewer writes that, "In times of uncertainty, the fiduciary obligations of every hotel operator should take on increased significance. As the pandemic continues to wreak economic havoc globally, and with a possible continued recession around the corner, hotel operators have a legal responsibility to their owners to give immediate attention to particular issues that may arise over the course of the hotel's operation and management. A failure to uphold these duties may result in an owner's loss of trust and confidence in the operator's management, and operators who breach their fiduciary duties will entitle owners to terminate their hotel management agreements with immediate effect."

Brewer is a frequent contributor to Hotel Business Review, and serves as featured “guest author” of the publication. Visit the publication and most recent article here.