Starwood Hotels & Resorts Announces Major Victory in Multi-Million Dollar Dispute
May 11, 2006 – Starwood Hotels & Resorts Worldwide, Inc. (NYSE:HOT) announced today a major victory in an arbitration relating to the ownership and management of two Westin hotels. A three-member arbitration panel issued a unanimous ruling on April 28, finding that Starwood and Westin Hotels Limited Partnership (“WHLP”) had prevailed in a 17-month long arbitration proceeding and were not liable for any portion of the more than $200 million Kalmia Investors, LLC (“Kalmia”) alleged as damages to the WHLP partnership in which it is an investor.
Kalmia asserted numerous claims against WHLP, Starwood and Westin Realty Corporation ("Westin Realty"), the general partner of WHLP, and sought lost profits, disgorgement of management fees, punitive damages and the alleged lost value from the sale of the two hotels in question.
The panel denied Kalmia's claims, stating, "Kalmia failed to carry its burden of proving, separately or in combination, misconduct (by Starwood, WHLP, or Westin Realty) violative of any contractual, fiduciary or other legal duty owed to Kalmia by those parties," and that, “the total damages sought by Kalmia were inflated, unsupported, and lacking in credibility.” The panel also characterized Kalmia's main theory of damages as “entirely speculative and highly improbable.”
“This is an important victory for us," said Kenneth S. Siegel, Chief Administrative Officer and General Counsel of Starwood Hotels. "This ruling is a major validation of Starwood's business practices and proves that we honored our duties to all parties involved and acted in the utmost good faith. We look forward to continuing to successfully manage the Westin St. Francis Hotel and the Westin Michigan Avenue Hotel.”
“The panel’s decision vindicates Starwood's management of these two great hotels," said William A. Brewer III, partner at Bickel & Brewer and lead defense counsel for Starwood. “We are pleased that the panel agreed and denied Kalmia's claims in all respects.”
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WSJ Reports on Government’s Probe of Tax Shelters
June 3, 2005 – The Wall Street Journal reports today on “a popular stock option transaction marketed by Bank of America and other institutions” that is at the center of an investigation launched in New York by Manhattan District Attorney Robert Morgenthau. According to the WSJ, the investigation has been joined by the Internal Revenue Service and the Securities and Exchange Commission.
The article comments on firm clients Sam and Charles Wyly. According to the article, the Wylys “feel strongly they only did that which was appropriate,” said Bill Brewer, their Dallas lawyer.
The two created their trusts for the benefit of family members and charitable purposes, Mr. Brewer said. They “hired all these professionals to do what they thought and still hope are legitimate arrangements,” Brewer said.
Read the full report here.