Yes, insiders are likely starting to reduce their positions.

While last week's news provides MHGC with some operating flexibility and delays the potential for default next June, this in conjunction with the extension of the shareholder protection plan makes a takeover much less likely.

What we have here now is a company in a very challenged operating environment, with hotels that are no longer leading edge in their respective markets, the company is burning through cash with a horrible a balance sheet and now has put a new President in place who is largely responsible for this anemic growth and irresponsible capital stack in the first place.
I think another part of this sell off is a vote of "no confidence" in this guy and for good reason. He has had a terrible development track record and since he has been Chief Investment Officer the stock has dropped 75%, now they've promoted him to President? Based on what merits? Fred put him there because he does not want to lose him because Fred can't run the place without him, is my guess. I think it also sets up a succession plan for Fred's retirement.

So in summary:
1) Insiders selling
2) No buyout coming
3) Burning cash/bad balance sheet
4) Shiny new competitive properties in all MHGC markets, particularly Miami, NY and LA
5) Tough operating environment for luxury segment util 2014

Where's the upside?

The only intelligent thing they have done recently is to fire 2 board members including Deepak Chopra.