Business Context and Reporting Period
This Form 8-K Current Report was filed by Ashford Hospitality Trust, Inc. on January 11, 2021. The filing addresses a series of fee deferrals and a subsequent payment related to the Amended and Restated Advisory Agreement and the Lismore Agreement between the Trust and Ashford Inc. (including its subsidiary Lismore Capital II LLC).
Key Financial Metrics
The filing discloses a specific cash outflow related to the settlement of deferred fees:
- Fee Payment: $14,411,432 paid to Ashford Inc. immediately prior to the closing of a proposed credit facility.
- Debt/Liquidity Context: The payment was timed to occur before the closing of a credit facility with affiliates of Oaktree Capital Management, L.P.
The filing text does not provide clear values for revenue, profit, operating cash flow, margins, or total debt levels for the reporting period.
Material Changes
The primary material event is the resolution of a multi-month deferral of base advisory fees and Lismore success fees covering October 2020 through January 2021. On January 11, 2021, the independent directors of Ashford Inc. granted a final deferral request, moving the payment deadline to the earlier of January 18, 2021, or immediately prior to the closing of the new credit facility. Consequently, the Trust settled the accumulated fees of $14,411,432 just before the credit facility closed.
Guidance, Outlook, and Risks
Management Commentary: The filing highlights the cooperative relationship between the Trust and Ashford Inc. regarding liquidity management during the deferral period. Ashford Inc. Directors waived any claims for breach of contract or damages arising from the absence of fee payments during the deferral period.
Risks and Contingencies: The filing notes that the information provided is not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 and is not incorporated by reference into other filings unless expressly stated.
Investor Verification Checklist
- Verify the terms and closing status of the proposed credit facility with Oaktree Capital Management affiliates.
- Confirm the total amount of deferred fees ($14,411,432) against the Trust's cash position and liquidity requirements.
- Review the impact of the fee payment on the Trust's working capital immediately following the credit facility closing.
- Check for any subsequent filings regarding the status of the Advisory Agreement and Lismore Agreement post-payment.