United Against Kronos Blog Site

With the New Year finally here, hopefully we are all safe and sound and looking forward to a much brighter 2009.  I decided to forego the video blog this week and just stick with typing.

I want to start this year with clearing up an errant posting I made awhile back in our forms at http://www.websitetoolbox.com/tool/post/unitedagainstkronos/vpost?id=3141398 .  Originally after viewing the document time and time again and having a few others review it we thought we had it figured out.   While sitting here doing more research and going back through that particular court document which can be found at http://kronoshotelsllc.com/images/2008/Nov/royalbank.pdf something caught my attention.  Something that somehow had previously went un-noticed.  Maybe it was the hope of better things for the people at those properties that clouded our vision and made us see what we wanted to see.  Maybe it was just carelessness.  Whatever the case something on page 7 of the document just stood out.  A paragraph on that page said “By letter dated November 17th, 2008, a true and correct copy of which is attached hereto and made a part hereof as Exhibit “K,” Defendant Brunswick instructed the manager of the Brunswick Hotel Property to cease operations at the Brunswick Hotel Property.”

Immediately it was jumped to the assumption that the Lenders were behind this letter.  That was not the case.  If you look at the wording, the letter was sent by DEFENDANT BRUNSWICK, meaning Kronos, the Lenders were the Plaintiffs and Prism were just the poor guys stuck in the middle of all this.  I wanted to get that cleared up.

Moving forward we are all well aware Kronos Hotels are in for a long year with court cases all across the United States.  With barely any properties under their control, and things coming at them from all directions one can only wonder how long they can carry on.

In todays world with so many companies facing financial difficulties and doing what they can to save their business it leaves a person shaking their head and wondering how 1 comapny like Kronos Hotels can keep their head above water.  If you dig deep enough in any company you will find things that will leave you standing there with your jaw dropped open like a 5 year old staring in the window of a candy store.  Fortunately for most of the people working for these companies, they are errors and they are fixed relatively quickly.  Or they may not be errors.  Hey lets face it.  We are in an age where getting one over on the next guy is common place. 

Anytime in the past if you hear of a company doing so much on such a wide scale its because they are going out of business.  Because the Government has stepped in, or some other agency and has put a stop to it. 

Not in this case.  In this case Kronos Hotels went relatively unnoticed, and unscathed.   How? Why? They are the questions we ask.  Well the short answer is money.  The Governent wants their money, the franshises want their money, the employees want their money, and the venders want their money.  And they all know if they hang in there long enough it will come to them.  As individuals if we tried to withhold payment like this we would not last 2 months much less well over a year. 

Lets break it down and look at who is to blame here.  IHG, Choice Hotels, and whatever other brand Kronos Hotels used.  They knew the conditions these properties were in.  They did inspections,  yet they continued to overlook not just the little stuff but the big stuff.  You have to look at it from their vantage point.  Does it make it right no but, does it make sense yes.  Take all the combined properties Kronos Hotels had under these Franchise names.  They each pay every month to be part of the Franchise.  They also pay extras for guest complaints, supplies etc.  So you see even a guest complaint is beneficial to a Franchisor because it makes them money.  So they dont want to just jump the gun and start pulling flags.  Thats alot of money lost if they do that.  But when the public pressure came along those flags were gone quicker then Billy Ray Cyrus singing carrer.  Could they have helped head this off, of course they could have.  Had they stood by their standards and not let the dollars that they would never see cloud their judgement, alot of these properties may have been able to be salvaged.

The Government: This applies to state, local, and federal.  Lets do the math, how much in back taxes do Kronos Hotels owe?  How many employees have been to Department of Labors and been told “we dont have record of you, we need proof” Or how many employees had been to the Department of Labor and their wages not been correct and once again, they are told they need proof.  These agencies could have been everyones saviors.  Had they squeezed and insisited they get paid immediately and not let them rack up millions in debt Charles Morais and crew may have been forced to sell these properties just to keep their heads above water.

The Lenders: they are just as guilty as everyone else in seeing dollars before reality.  Had they stepped in sooner after so many non-payments or late payments or whatever the case is, this again could have all been avoided.  They are guilty in the same sense of the Franchisors. 

So as you can see had the above three categories stepped in sooner, alot of these properties could have been saved before they got ruined.  They could have been sold at Public Auctions or by Kronos Hotels, just so they can stay in business with other properties.  They didnt, now look at where everyone is.  Most have Prism there managing them, alot still do not.  Why did it have to get to the point where it did for someone to finally step in.  None of us will ever quite know the real answer, all we can do is speculate.

Ok so now here we have Kronos Hotels, racking up the debt and ruining properties.  They money they made off these properties had to go somewhere because it did not go to the properties. And here recently they just stopped fighting alot of the court cases, never respond, never appear.  Its as if to a point they have just givin up.  So lets assume the money is in their pockets (we cant think of where else it could be) They are look at all these cases and the attorneys fees it will costs them to continue fighting.  At the time of this writing we know of at least 4 cases where Kronos Hotels just never even bothered responding to the complaints and will ultimately be found guilty by default and judgement will go to the Plaintiff (the lenders).  These properties with their liens against them, back owed bills, renovation issues, could be quite expensive to hold on to.  By the time the liens and everything else are paid they could be paying more then they originally paid for the property itself.  So why fight them.  Let them be taken and let them be sold in public Auction, let the liens and financial obligations they racked up become someone elses problems.  Wash their hands and move on to the next property.  So again, just another tactic in finding away around the system.

So again we look at all that and we wonder, how can a company keep going like this?  How can they get away with this as long as they have? I dont think any of us will know the true answer.  All we do know is money talks.  And thats what this is all about, money.