Dubai developer hits LA hotel group with fraud allegations

Owner of former Viceroy hotel alleges the company scared off visitors

Los Angeles /
Sep.September 08, 2017 06:30 PM

West Hollywood-based Viceroy Hotel Group is in legal hot water following a lawsuit brought by the owner of a $1 billion luxury hotel in Dubai.

Developer Kabir Mulchandani of Five Holdings filed a lawsuit in Los Angeles Superior Court on Thursday accusing Viceroy of fraud and mismanagement. 

Viceroy was hired in 2013 to run the 477-unit hotel now called FIVE Palm Jumeirah Dubai, Bloomberg reported.

Shortly after opening in March 2017 under the name Viceroy Palm Jumeirah Dubai, owner Five Holdings grew concerned after guests complained about the food and service.

But it discovered bigger issues, according to the complaint.

“Investigations by two respected accounting firms into the operations of the hotel have revealed fraudulent accountings, breach of trust, self-dealing, doctored invoices, phony budgets, unapproved budget overruns, and concealment of mismanagement by Viceroy Dubai,” Five Holdings said in its complaint.

The developer canceled its contract with Viceroy in June and changed the hotel’s name. 

It alleges that Viceroy claimed to be the rightful owner of the hotel and told travel agents that they could be fined or imprisoned if they booked rooms. Expedia stopped new bookings until its legal team could verify Viceroy’s claims, according to the suit.

Five Holdings estimates that it may have lost more than $100 million in contracts and bookings because of Viceroy’s ownership claims, according to Bloomberg. The complaint includes claims for libel and defamation. [Bloomberg] — Subrina Hudson


Related Articles

arrow_forward_ios
The future of San Francisco’s Oceanwide Center is up in the air again (Getty, Foster and Partners)

Contractors pull out as Oceanwide Center sale falls through again

Contractors pull out as Oceanwide Center sale falls through again
Granite CEO Michael Dardick and Industrious CEO Jamie Hodari

Industrious partners with landlords to offer tenants satellite workplaces

Industrious partners with landlords to offer tenants satellite workplaces
Colorado Campus at 2041-2115 Colorado Avenue and Northwestern Mutual CEO John E. Schlifske

Northwestern Mutual picks up Santa Monica office campus for $166M

Northwestern Mutual picks up Santa Monica office campus for $166M
Prop 15 property tax measure draws millions (Credit: iStock)

Prop 15 property tax measure draws millions of dollars from for and against campaigns

Prop 15 property tax measure draws millions of dollars from for and against campaigns
California is allowing barbershops and salons to reopen under new coronavirus mitigation guidelines (Credit: Noam Galai/Getty Images)

California allows barbershops to reopen, but LA holds back

California allows barbershops to reopen, but LA holds back
LA County assessor Jeffrey Prang

LA County properties valued at nearly $2 trillion…before pandemic

LA County properties valued at nearly $2 trillion…before pandemic
First District Supervisor Hilda Solis (Credit: Rebecca Sapp/Getty Images)

LA County select reopening target date for restaurants and retailers

LA County select reopening target date for restaurants and retailers
Eric Garcetti orders a moratorium on LA commercial evictions (Photo credit: iStock photo)

Garcetti orders a moratorium on commercial evictions in LA

Garcetti orders a moratorium on commercial evictions in LA
arrow_forward_ios

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

Loading...