Hong Kong-based investor JTS Trading sued three companies seeking $350 million based on claims that it was cut out of a deal to buy the Plaza Hotel, Dream Downtown Hotel and London’s Grosvenor Hotel.
JTS claims that it had a joint venture deal with Trinity White City Ventures Limited, a United Arab Emirates private trust, to buy the properties, with JTS contributing $850 million and Trinity contributing $250 million, the New York Observer reported.
The suit says that JTS and Trinity were working together on proposals for the properties in January and February, when suddenly Trinity revealed financing agreements to buy the properties in conjunction with a Sahara India Pariwar subsidiary, eliminating JTS’ role.
Trinity, Sahara and UBS Financial Services, which is providing financing, are being sued.
According to the complaint, Trinity used JTS’ offer for $850 million in equity capital to “open the door to negotiations with Sahara, and then when the opportunity presented itself … under the transparent guise of a ‘loan-to-own’ structure, refused to honor its contractual commitments” to JTS.
“Plaintiff has been denied its rights under the agreement as the intended 70 percent owner of the general partnership, including but not limited to various management fees which cannot presently be determined but which are estimated would have been in excess of $350 million, as well as the anticipated increase in the value of the target properties,” the suit says.
Meanwhile, Sahara is seeking to leverage its stake in the hotels to get its founder, Subrata Roy, out of prison in New Delhi, where he is being held on $1.6 billion bail. Sahara acquired its stake in the Plaza for $600 million in 2012. [NYO] — Tess Hofmann