OTK Associates says Mondrian Soho nears foreclosure

TRD New York /
Jun.June 04, 2013 12:30 PM

OTK Associates, one of the largest shareholders of Morgans Hotel Group, wrote in a recent letter to investors that foreclosure proceedings began in January against the Mondrian Soho hotel, Hotel Chatter reported.

Additionally, a joint venture that owns the hotel, at 9 Crosby Street, filed a lawsuit against OTK seeking to terminate its management agreement, the website said. (Morgans owns a 20 percent interest in the joint venture.)

“We intend to vigorously defend our rights to continue managing the property under our management agreement and related agreements, but we cannot assure you that we will be successful,” OTK wrote in the letter.

As previously reported, the Morgans Hotel Group, founded by developer Ian Schrager and Studio 54’s Steve Rubell, is spending tens of millions of dollars on lawyers and bankers to undo a transaction that landed it $72 million in late 2009 from Ron Burkle’s Yucaipa Companies.

OTK, which voted for the 2009 transaction, is running a slate of seven directors to try to unseat the Morgans board at its June 14 annual meeting.

Morgans said today that if its board is re-elected at the meeting, the directors would begin to explore strategic alternatives such as a possible sale of the company, GlobeSt reported. [Hotel Chatter] and [GlobeSt]Mark Maurer


Related Articles

arrow_forward_ios
Courtyard by Marriott in Herald Square and Marriott CEO Arne Sorenson (Google Maps, Getty)

Courtyard by Marriott in Herald Square to close permanently

Courtyard by Marriott in Herald Square to close permanently
From left: Embassy Suites at 60 West 37th Street, Ashford Hospitality Trust CEO Douglas Kessler, Magna Hospitality Group CEO Robert Indeglia and Royalton Hotel at 44 West 44th Street (Ashford, Magna Hospitality, Google Maps)

Royalton, Garment District hotels sell at discounts

Royalton, Garment District hotels sell at discounts
Hilton CEO Christopher Nassetta and the hotel at 234 West 42nd Street (Google Maps; Getty; Hotel Planner)

Hilton Times Square to close permanently

Hilton Times Square to close permanently
From left: Holiday Inn Express at Wall Street, Cindat CEO Greg Peng and Holiday Inn Express at Times Square (Credit: IHG/Booking and Cindat)

Cindat looks to sell stake in Manhattan hotel portfolio at discount

Cindat looks to sell stake in Manhattan hotel portfolio at discount
Thor Equities’ Joseph Sitt and Palmer House Hilton at 17 East Monroe Street (Google Maps)

Joe Sitt’s Thor faces massive foreclosure suit at trophy Chicago property

Joe Sitt’s Thor faces massive foreclosure suit at trophy Chicago property
Commercial real estate indices were down compared with this time last year, but buyers still aren’t selling — yet (iStock)

Report shows how much commercial real estate has fallen

Report shows how much commercial real estate has fallen
Foreclosures may be on the horizon for New York City’s hotel market, where there’s nearly $1.5 billion in unpaid CMBS debt. (iStock)

Nearly $1.5B in NYC hotel loans are unpaid

Nearly $1.5B in NYC hotel loans are unpaid
(iStock)

Half empty or half full? Hotel occupancy rate nears 50%

Half empty or half full? Hotel occupancy rate nears 50%
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...