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The Real Deal Los Angeles

SBE Entertainment Group gears up for trial over hotel sale

Investors accuse hotelier Sam Nazarian of self-dealing in SLS deal
January 18, 2017 12:00PM

Sam Nazarian (Credit: Twitter)

L.A. hospitality guru Sam Nazarian is headed to court.

The hotelier and his company, SBE Entertainment Group, are accused of self-dealing and breaching fiduciary duties in the sale of the SLS Hotel South Beach in 2015.

The plaintiff, Century City-based firm 4 Corners Holdings, alleges that Nazarian and SBE neglected to pay back its investment in the South Beach hotel project even after the property was sold. Nazarian instead favored CIM Group, another partner on the project, because it offered the hotelier lucrative management contracts at Hollywood’s Redbury Hotel, 4 Corners claimed. The company is seeking $15 million in damages.

Some of the original claims contained within the lawsuit have been dismissed, but “triable issues of material fact” remain, a Los Angeles Superior Court judge ruled in November, according to the Los Angeles Business Journal. The plaintiff’s attorney, Scott Gizer of Early Sullivan Wright Gizer & McRae in Mid-Wilshire, said his client’s primary allegations remain intact.

The trial date is set for February.

“The case is about the defendant breaching his fiduciary duty and misrepresenting how much my clients would make,” Gizer told the Business Journal. “We are very confident that at trial our claims will be borne out.” [LABJ]Cathaleen Chen