[Fido969]

The payoff on the loans must have been more than the value of the property. It would make sense then not to pay off the loans, and let go of the property. Instead, let the bond holders deal with it. They’ll take the loss, but won’t lose everything.

[Svartalfiar]

The payoff on the loans must have been more than the value of the property.

I don't think that's that likely.. Even in a crappy place like SanFran, three thousand rooms of hotel is quite a lot of property. If it was just about saving money from being underwater, they would have made this decision a year or two ago. At six months left, they should have about 5% of the total loan remaining. Do they really think the hotels have lost 95% of their value? (Actually more since the loan is likely somewhat less than the original value.)