People rarely think about who owns and operates the hotel they’re staying in.

In most cases, if I’m in a Marriott or a Hilton, I just assume that the brand on the marquee is the company running the property. In reality, that’s often not the case and many hotel brands are franchised, with some run by large groups and others family-owned.

That means that, while the brand might be perfectly healthy, the franchise operator might be facing financial distress.

In the case of Phoenix American Hospitality, LLC, American Hospitality Properties REIT, Inc., American Hospitality Properties REIT II Inc., and various affiliated companies, a complicated series of events, including an SEC investigation and enforcement action, now surround a series of Chapter 11 bankruptcy filings in Texas, which are published on PacerMonitor.

What is Phoenix American?

The American Hospitality Properties REITs own a number of hotel properties under the Hilton and Marriott brands. The company focuses on, but is not limited to, what it calls “Premium Select Business” hotels.

In a PDF aimed at investors, the company shared that it likes these properties because they can price rooms higher based on demand.

“Unlike apartments, offices, or warehouses, hotel properties have no long-term leases. Rooms rent out by the day, meaning the hotel sector can quickly and easily adjust pricing up or down daily, or even hourly, based on demand and other factors,” it shared.

The PDF also shared another reason the American Hospitality REITs used to sell investors on the fund.

“As experienced operators, we embrace the small staff required compared to resorts or other full-service hotels, we pay them a little better, reducing turnover and increasing
customer satisfaction,” the company shared.

American Hospitality fired Phoenix American

Phoenix American Hospitality, LLC (PAH) was the external manager for both American Hospitality Properties REIT, Inc. and American Hospitality Properties REIT II, Inc. (AHP). The REITs entered into management arrangements with Phoenix under which Phoenix provided management and administrative services.

Phoenix was responsible for much of the REITs’ management infrastructure, while the REITs themselves owned the real-estate investments. In other words, you can think of the structure as AHP REITs = investment/ownership entities; Phoenix = external management company.

It’s a fairly common structure, but investors who owned shares of the real estate investment trusts (REITs) did not have an interest in Phoenix American Hospitality.

in May 2026, when both REITs terminated their management agreements with Phoenix and moved to new, internal, management arrangements. AHP REIT appointed Joseph Reardon as president, while AHP REIT II entered into a services agreement with AHP, according to an SEC filing.

“There is real opportunity in today’s hospitality market for a focused, well-run company. My role is to help put AHP on firm operational and financial footing so that it is ready to act when the right opportunities arise,” Reardon said in a press release.

Phoenix American settled with the SEC

The SEC announced a settled enforcement action against Dallas-based Phoenix American Hospitality, LLC (PAH) and its president, William Lee “Perch” Nelson. The case centers on an alleged $86 million hotel-focused investment offering that pulled in capital from more than 2,000 retail investors under Regulation A, according to a document from the SEC.

Sonn Law Group explained the basis of case.

“For real estate investors, the pitch was a familiar one: a tangible portfolio of commercial hospitality assets yielding predictable, double-digit income. According to federal regulators, however, the underlying reality was built on severe misrepresentations,” the law firm shared.

The SEC’s complaint was filed on June 4, 2026, in the Northern District of Texas, and final judgments were ordered on June 5, 2026. Investors can review the official regulatory findings here.

Here are some of the charges made by the SEC:

• The SEC’s complaint, filed in the United States District Court for the Northern District of Texas, alleged that PAH and Nelson raised approximately $86 million from more than 2,000 retail investors in the two funds from March 2022 through July 2024.
• According to the complaint, PAH, through Nelson, claimed that one fund owned as many as 11 hotels, while, in reality, the fund owned only a preferred equity interest in a single hotel until January 2024, when it acquired interests in other hotels.
• As further alleged, PAH, through Nelson, made untrue statements that both funds made regular profit distributions of up to 12% per year to investors, when, in reality, neither of the funds was profitable, and distributions were primarily funded by returns of investor capital.

“Without admitting the allegations in the SEC’s complaint, PAH and Nelson each consented to the entry of a final judgment, subject to court approval, in which each agreed to be permanently enjoined from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder,” according to the SEC release.

The final judgments, if approved by the court, also would order PAH to pay a $591,127 civil penalty and Nelson to pay a $118,225 civil penalty, as well as impose a five-year officer and director bar on Nelson.

The AHP REITs were connected to the SEC investigation through their former manager, Phoenix American Hospitality.

In July 2024, American Hospitality Properties REIT II disclosed that Phoenix had received an SEC subpoena seeking information about Phoenix and related entities, including the REIT. American Hospitality Properties itself was not named as a defendant in the SEC enforcement action.

What does AHP own?

AHP does not list the properties it owns, or has an interest in, on its website. The PDF referenced above shows a long list of properties, but the document predates the SEC filing.

An SEC filing from 2024 shows the company having an interest in the following properties:

• TownePlace Suites, Springdale, Arkansas: 92 rooms
• Aloft Rogers, Rogers, Arkansas: 124 rooms
• Fairfield Inn & Suites, Jonesboro, Arkansas: 83 rooms
• Courtyard Baton Rouge, Louisiana: 121 rooms
• Residence Inn Baton Rouge, Louisiana: 108 rooms
• TownePlace Suites, Harahan, Louisiana: 124 rooms
• Hampton Inn & Suites, Fort Myers, Florida: 120 rooms

Those are not necessarily the only properties owned or operated by the company.

The companies’ current filings do not establish whether investors will receive additional distributions as the bankruptcy cases proceed. The July 2024 SEC filing explicitly says the company temporarily paused both distributions and solicitation of additional investments.

AHP faces a new lawsuit

Bronstein, Gewirtz & Grossman, LLC, a self-described investor-rights law firm, has filed a class action lawsuit against Phoenix American Hospitality, LLC, American Hospitality Properties REIT, Inc., American Hospitality Properties REIT II, Inc., and William Lee Nelson.

“This lawsuit seeks to recover damages against Defendants for alleged violations of the federal securities laws on behalf of all persons and entities that purchased or otherwise acquired securities in American Hospitality Properties REIT, Inc., and/or American Hospitality REIT II, Inc., between March 1, 2022 and July 31, 2024, both dates inclusive (the “Class Period”), the law firm shared on its website.

The complaint alleges that the defendants made false and/or misleading statements and/or failed to disclose that:

1. Phoenix’s public statements concerning its business and operations were materially false and/or misleading; and
2. Subsequent SEC filings and disclosures revealed the truth concerning Phoenix’s operations and the falsity of Defendants’ prior statements.

None of the named companies have commented on the lawsuit or how it relates to the Chapter 11 bankruptcy filings.

These are the companies which have filed for Chapter 11 protection

• American Hospitality Properties REIT, Inc.: Case #26-80071
• American Hospitality Properties REIT II, Inc.: Case #26-80072
• AHP Master Lease, LLC: Case #26-80073
• AHP REIT Port B LLC: Case #26-80074
• AHP RI Cape Canaveral, LLC: Case #26-80075
• AHP LP7 Bentonville, LLC: Case #26-80076
• AHP LP7 CY Baton Rouge, LLC: Case #26-80077
• AHP LP7 Fayetteville, LLC Case #26-80078
• AHP LP7 FT Meyers, LLC: Case #26-80079
• AHP LP7 Jonesboro, LLC: Case #26-80080
• Lakemore-Phoenix Investment Platform B, LLC: Case #26-80081
• AHP LP7 Metairie, LLC: Case #26-80082
• PAH Charlotte Hospitality JV, LLC Case #26-80083
• PAH Charlotte JV, LLC: Case #26-80084
• PAH Charlotte LLC: Case #26-80085
• AHP LP7 RI Baton Rouge, LLC: Case #26-80086

While the PAH abbreviation appears on some of the companies that have filed, it does not appear that Phoenix American Hospitality has itself filed for bankruptcy protection.

A quick look at how REITs work

• What is a REIT? A company that owns and typically operates income-producing real estate, including hotels.
• How do investors make money? REITs can distribute income generated by their real-estate holdings to investors.
• Can investors lose money? Yes. Non-traded REITs can be particularly illiquid and carry additional risks.
  • Source: Investor.gov

AHP and PAH Chapter 11 bankruptcy facts

• American Hospitality Properties REIT, Inc. filed for Chapter 11 bankruptcy protection on Oct. 4, 2026, in the U.S. Bankruptcy Court for the Northern District of Texas. The case number is 26-80071, according to filings on the Daily Dac.
• American Hospitality Properties REIT II, Inc. also filed Chapter 11 on Oct. 4, 2026. The filing is case No. 26-80072 in the Northern District of Texas, the same source shared.
• Several related American Hospitality Properties entities also filed Chapter 11 on Oct. 4. The filings include AHP Master Lease LLC, AHP REIT Port B LLC, AHP RI Cape Canaveral LLC and several AHP LP7 entities, according to the shared documents.
• The bankruptcy filings come just days after a securities class-action lawsuit was filed against Phoenix American Hospitality, American Hospitality Properties REIT, American Hospitality Properties REIT II and William Lee Nelson. The lawsuit covers investors who purchased the REITs’ securities between March 1, 2022, and July 31, 2024, and alleges violations of federal securities laws. The allegations have not been adjudicated, according to Journal of Business News.

Related: These are the 76 Leslie’s Pool locations closing as part of Chapter 11