Originally Posted by
donotblink
Sonder was providing active management of the properties (housekeeping, maintenance, security, etc) Sonder became insolvent and didn’t have money to pay staff any longer, presumably allowing guests to stay would be a liability for the real estate investment trusts that are not in the business and are not equipped to provide those services. Also, the reits wouldn’t have any way to collect payments from guests and doing this could have violated the terms of the lease they had with Sonder. The furnishings and fixtures in the Sonder properties are presumably property of Sonder and may be liquidated or forfeited…I’m not sure what will happen.
Sure, it would definitely violate Sonder's leases, but I don't think that would be a problem for Marriott. If we look at Sonder in Europe[1], for example, they have dozens of holding companies for their various properties. Businesses do that to insulate themselves, i.e: Sonder Hospitality UK Ltd can go under without hurting SONDER INTERNATIONAL HOLDINGS LTD which in turn can go under without hurting Sonder Holdings Inc. There are layers and layers of corporate insulation between Sonder properties (where guests are staying) and Marriott. And in the opposite direction too: Sonder Hospitality UK Ltd still exists.
Even in the most catastrophic scenario, where the leases include the rights to retake the property in the event of parent company bankruptcy, and the building owner hears of Sonder going under, and immediately dispatches a team to the building to secure the building by removing guests, that's no worse than what Marriott chose to do by telling guests to leave. The more realistic scenario is, as with most bankruptcies, things move slow, the buildings remain Sonder branded buildings for weeks, months or even years, while the bankruptcy slowly chugs along.
WeWork is a similar example, at a larger scale. I had an office in a WeWork when things went finally came crashing down, while they were jettisoning buildings, violating leases etc. and the buildings remained as-is, the offices continued to exist. You can walk into some former WeWork buildings in London today which are still WeWorks in all but name, because someone bought up the abandoned lease and everything inside, without any interruption to users.
It seems like Marriott chose the worst possible outcome, every guest being evicted immediately, and they chose to own that decision.
[1]
Full accounts made up to 31 December 2023
Originally Posted by
CPH-Flyer
Who sent the email saying that? Sonder or Marriott?
Marriott did! That's what has me so baffled. Marriott sent that before Sonder had even communicated with their own employees, Sonder employees learned about the situation from that Marriott email (when guests went down to the front desk and said, "what's the deal with this email I just got from Marriott?").