SEC opens investigation into hotelier Monty Bennett’s companies

Ashford Inc. — among 3 under investigation — and affiliated firms came under scrutiny for receiving $68M in PPP loans while paying out big dividends

TRD NATIONAL /
Aug.August 04, 2020 03:30 PM
Hotelier Monty Bennett and Marriott Beverly Hills (Bennett via Ashford Inc.; Marriott via Booking)

Hotelier Monty Bennett and Marriott Beverly Hills (Bennett via Ashford Inc.; Marriott via Booking)

Texas-based Hotelier Monty Bennett and his affiliated companies came under public scrutiny in the spring when they received $68 million in coronavirus-related federal funding, despite having paid out millions in preferred dividends.

Now, the U.S. Securities and Exchange Commission has opened an investigation into at least three companies tied to Bennett, the Wall Street Journal reported. They are: Ashford Inc., along with subsidiaries Ashford Hospitality Trust and Braemar Hotels & Resorts Inc.

The investigation targets related-party deals, including an agreement real estate investment trust Ashford Hospitality signed with a subsidiary of parent company Ashford Inc. The deals involved renegotiating mortgage debt while Ashford Inc. said it could no longer afford interest payments on debts, the Journal reported.

The agreement could have paid Ashford Inc. up to $20 million to renegotiate mortgages and ask for forbearance from lenders. Bennett is a major shareholder in Ashford Inc.

The SEC also asked for “accounting policies, procedures, and internal controls related to such related party transactions,” according to the Journal.

Shortly after having received the PPP funding, and following public backlash, the companies tied to Bennett said they would return the money, which was meant to help businesses pay necessary expenses including payroll, rent, mortgage interest, and utilities. The total forgivable loan amount was among the most received by any public company.

Ashford Inc. and its subsidiaries laid off around 7,000 workers during the pandemic. Regarding the PPP funding, the firms blamed the government on what it called “inconsistent federal guidance that put the companies at compliance risk.” [WSJ] — Dennis Lynch


Related Articles

arrow_forward_ios
(iStock)

With eviction moratorium set to expire, landlord-backed group raised more funds to help renters

With eviction moratorium set to expire, landlord-backed group raised more funds to help renters
Rents in ZIP codes where college students make up at least 20 percent of the population dipped half a percent in August (iStock)

Rent prices fall in college ZIP codes as remote learning rises

Rent prices fall in college ZIP codes as remote learning rises
Councilwoman Carlina Rivera (Getty, iStock)

City Council extends restaurant, retailer lease protections

City Council extends restaurant, retailer lease protections
With about $23 billion of hotel-related CMBS loans in forbearance, more lenders are looking to offload those mortgages. (iStock)

Hotel industry is in trouble and more lenders want out

Hotel industry is in trouble and more lenders want out
Are New Yorkers coming back? These charts tell the story

Are New Yorkers coming back? These charts tell the story

Are New Yorkers coming back? These charts tell the story
(iStock)

Laughing matters: Comedy club owners call for reopening

Laughing matters: Comedy club owners call for reopening
New York City restaurants have struggled to make rent throughout the pandemic but August marked a new high. Andrew Rigie of the NYC Hospitality Alliance (Getty; Institute of Culinary Education)

Rent struggles for NYC restaurants now worse than ever

Rent struggles for NYC restaurants now worse than ever
(iStock)

Movie theaters might not come back after all

Movie theaters might not come back after all
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...