Sam Chang hit with $2M suit over Club Quarters hotels

Management company claims it’s owed money at 3 Manhattan properties

New York /
Nov.November 20, 2019 08:15 AM
Sam Chang and 40 West 45th Street (Credit: Google Maps)

Sam Chang and 40 West 45th Street (Credit: Google Maps)

When Sam Chang thought he was finally out, the New York hotel market pulled him back in.

The prolific hotel developer, who retired earlier this year to pursue pigeon racing, is facing a roughly $2 million lawsuit over breach of contract allegations at three Manhattan hotels.

Club Quarters Management Company claims that Chang’s McSam Hotel Group owes it money under the terms of termination and purchase-and-sale agreements at Club Quarters’ Times Square, Wall Street and Rockefeller Center locations.

Club Quarters entered into management and operation agreements on the properties with Rockwood Capital between 2005 and 2007, according to a complaint filed Monday. Chang bought the properties from owner Rockwood in late 2016 and early 2017, and Club Quarters initially continued to run the hotels, the lawsuit says. However, Chang and Club Quarters “ultimately had several disputes regarding the management and operation of the hotels,” according to the lawsuit.

They entered into a termination agreement that ended Club Quarters’ management of the Wall Street and Rockefeller Center hotels “in exchange for a sizeable payment,” the lawsuit says. Chang has not paid the $57,555.82 due under the agreement, according to the lawsuit.

Chang also did not give people working at the Rockefeller Center and Wall Street hotels the chance to keep their jobs despite saying he would, which led to about $1.3 million in losses for Club Quarters, the lawsuit says.

Club Quarters is also claiming Chang owes it money from vendor and customer payments that were mistakenly made to his company instead of the management company at the Times Square hotel. The suit also demands the release of $150,000 from an escrow account.

Representatives for Chang did not respond to a request for comment. Joshua Bernstein of Akerman, attorney for Club Quarters Management Company, declined to comment.

Chang, one of the most prolific hotel developers in New York City, said in May that he was going to retire and spend more time racing pigeons, in part because of a new law that restricts hotel development in manufacturing zones.


Related Articles

arrow_forward_ios
Clockwise from top left: Charles Cohen, Douglas Durst and 657 West 57th Street Avenue (Getty, Google Maps)
Durst sues Landmark Theatres for $49M in damages, unpaid rent at UWS cinema
Durst sues Landmark Theatres for $49M in damages, unpaid rent at UWS cinema
Residence Inn Austin Northwest, TownePlace Suites Austin Northwest and Chatham Lodging Trust CEO Jeffrey Fisher (Marriott, Chatham Lodging Trust)
Chatham Lodging Trust buys two Marriott-branded hotels in Austin for $71M
Chatham Lodging Trust buys two Marriott-branded hotels in Austin for $71M
27 Whitehall Street (Google Maps, iStock)
Fidi landlord accused of permitting massage parlor prostitution
Fidi landlord accused of permitting massage parlor prostitution
Construction worker accuses JDS Development of discrimination
Construction worker accuses JDS Development of discrimination
Construction worker accuses JDS Development of discrimination
Family feud for $11M Lundy’s restaurant building boils over
Family feud for $11M Lundy’s restaurant building boils over
Family feud for $11M Lundy’s restaurant building boils over
Photo Illustration of Paramount Group Chairman, CEO and President Albert Behler in a Manhattan Equinox (Paramount, Equinox, Getty)
Despite rent-deferral agreement, landlord claims Equinox still won’t pay
Despite rent-deferral agreement, landlord claims Equinox still won’t pay
NAA president Robert Pinnegar (iStock, NAA)
Landlords sue federal gov’t over rental losses during CDC eviction ban
Landlords sue federal gov’t over rental losses during CDC eviction ban
David Grutman and Pharrell’s Goodtime Hotel had received nearly 30 noise violations (Carma Connected, Getty)
Too much of a good time? David Grutman and Pharrell’s Goodtime Hotel could lose entertainment permit
Too much of a good time? David Grutman and Pharrell’s Goodtime Hotel could lose entertainment permit
arrow_forward_ios

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

Loading...