Securities law firm investigating Morgans-SBE deal

Rigrodsky & Long looking into "potential legal claims" against hotel manager's board

TRD MIAMI /
May.May 10, 2016 03:45 PM

From the New York website: A securities law firm is investigating Sam Nazarian’s planned buyout of Morgans Hotel Group and exploring “potential legal claims” against Morgans’ board of directors.

Rigrodsky & Long said Tuesday that it is looking into “possible breaches of fiduciary duties and other violations of law” related to the beleaguered hotel operator’s deal this week to be acquired by Nazarian’s SBE Entertainment Group.

Los Angeles-based SBE is paying $2.25 per share in cash for all outstanding shares of Morgans common stock in a transaction representing a total enterprise value of roughly $794 million, Morgans announced yesterday.

Nazarian, founder and CEO of SBE, will helm the combined company and acquire all of Morgans’ boutique hotel brands, as well as ownership of Morgans’ Hudson New York hotel in Midtown and Delano South Beach hotel in Miami.

The deal would resolve a long-running search by Morgans for a buyer that would recapitalize the company and provide a new strategic direction, with Morgans plagued in recent years by shareholder infighting that managed to derail previous merger talks with SBE last year.

But Rigrodsky & Long which has offices in Wilmington, Del., and Garden City, N.Y., and specializes in securities law and corporate governance litigation – said it is examining whether Morgans’ board, which is chaired by Vector Group president and CEO Howard Lorber, failed to properly market the company and “obtain the best possible value for Morgans’ shareholders” before striking the SBE deal.

In a release announcing the investigation, the law firm reached out to Morgans shareholders who acquired their stock before the announcement of the deal and may “think the proposed buyout price is too low.”

Representatives for both Morgans and Rigrodsky & Long did not return requests for comment.


Related Articles

arrow_forward_ios
Related Group launches pre-construction sales for beachfront condo in Cancun

Related Group launches pre-construction sales for beachfront condo in Cancun

SBE partnering with Ari Pearl to build $220M SLS resort in Hallandale Beach

SBE partnering with Ari Pearl to build $220M SLS resort in Hallandale Beach

AccorHotels to buy half of Sam Nazarian’s SBE Entertainment

AccorHotels to buy half of Sam Nazarian’s SBE Entertainment

Blue Road buys Redbury South Beach for $32M, plans expansion

Blue Road buys Redbury South Beach for $32M, plans expansion

Movers & Shakers: Missoni Baia names sales team, NYC broker to lead Keller Williams office in Fort Lauderdale…and more

Movers & Shakers: Missoni Baia names sales team, NYC broker to lead Keller Williams office in Fort Lauderdale…and more

Sam Nazarian on the LA hotel market and potential merger with Hakkasan Group

Sam Nazarian on the LA hotel market and potential merger with Hakkasan Group

Sbe scores $425M refi for Delano South Beach, Hudson Hotel

Sbe scores $425M refi for Delano South Beach, Hudson Hotel

Hyde Resort & Residences in Hollywood hosts grand opening: PHOTOS

Hyde Resort & Residences in Hollywood hosts grand opening: PHOTOS

arrow_forward_ios