/ / / /

Morgans Hotel Group is Getting Sued...Again

June 14, 2013 at 10:53 AM | by | Comments (0)

Update 11:50AM, 6.14.13: The board has voted! See results below!

Man, the Morgans Hotel Group cannot catch a break.

The parent company to such hip hotels like the Delano South Beach and The Hudson in New York has been sued again. This time, the lawsuit's been filed in Istanbul by a company called JMJ Development, LLC who is claiming Morgans Hotel Group, its CEO and a property owner engaged in "breach of contract, tortuous interference with existing and prospective contracts, intentional misrepresentation, conversion, fraud, and conspiracy." That's some serious stuff. You can read all the nitty gritty accusations on the press release but here's a snippet:

Without JMJ's knowledge or participation, Morgans and Coruk created a new Turkish company to own and develop the hotel, Morbel Hospitality, in which Michael Gross and Richard Szymanski, CFO of Morgans, are directors. According to a December 2011 press release, Morgans released $10 million to the new company under terms remarkably similar to the terms negotiated by JMJ. The parties conspired to circumvent the agreements to JMJ's detriment.

Meanwhile, the other drama that's been going on with Morgans board members should come to a head today with Reuters reporting that incumbent board may stick around after saying it would be open to selling the company. And very interestingly, Morgans has apparently "rejected two takeover bids from a large international hotel company since November." Oooo who could it be??? Analysts have stated Marriott and Starwood would be good potential candidates. That. would. be. amazing. Then maybe finally Morgans will start offering free WiFi, at least in their lobbies!

Some bright news in the Morgans portfolio? The famed Mondrian Los Angeleson Sunset Boulevard is sporting a new lobby and SKY Bar look, thanks to recent renovation and have just opened a new carefully curated lifestyle store called BASE. Room rates are currently $279 a night.

UPDATE: The board has voted and all of OTK Associates nominees have been elected. Here's the statement from OTK:

OTK Associates, LLC (“OTK”), the largest shareholder of Morgans Hotel Group Co. (“Morgans”) (Nasdaq: MHGC) with 13.9% of the outstanding common stock of the company, today announced that, based on the preliminary results, Morgans stockholders have voted overwhelmingly to elect all seven OTK nominees – John Dougherty, Jason Kalisman, Mahmood Khimji, Jonathan Langer, Andrea Olshan, Michael Olshan and Parag Vora – to the company’s board of directors. Certification of the final results by the independent inspectors of elections, IVS Associates, is expected to be completed shortly.

Comments (0)

Post a Comment

Join the conversation!

Not a member? .