Gansevoort Files Suit Over Miami Hotel
PRESS RELEASE -- Hotels, 2/5/2010 11:02:22 AM
February 5, 2010 - Gansevoort Fla., LLC, the current manager of the Gansevoort South Hotel in Miami and an affiliate of the Gansevoort Hotel Group, filed suit today against Column Financial, an affiliate of Credit Suisse. The suit is seeking a judicial determination regarding the status of the existing management agreement between the hotel ownership and Gansevoort Fla. The suit alleges that Column's affiliates, as the current owners of the Hotel, do not have the right to terminate the management agreement and dismiss Gansevoort Fla. as manager of the 334-key Gansevoort South resort. The suit further alleges that the current ownership is in breach of the agreement and intends to replace the existing management with a management company with inadequate operating experience for the clientele, style, cachet and vast array of amenities of Gansevoort South, while continuing to operate the Hotel under the prestigious Gansevoort name.
Gansevoort Fla. has been operating the highly-successful hotel despite the failure of the condominium market, forcing its affiliates to default on its $403 million loan that jointly secured the hotel and the condominium elements of the project.
According to Michael Achenbaum, President of Gansevoort Hotel Group, "Though Gansevoort South is profitable, and amongst the leaders in its competitive set, Column and its affiliates are attempting to violate a legally binding agreement as retribution for the failure of the condominium element of the project. Obviously, they see the value we have created as they have in writing stated that they intend on capitalizing on our brand name. The apparent successor in the managerial role leaves us concerned that future Gansevoort South guests will be disappointed with the quality of their hotel experience compared to what they have come to expect at a Gansevoort property. We sought to reach an amicable solution with Credit Suisse and we will continue to do so."
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