All posts tagged: Legal

Confidentiality

THE PROOF IS IN THE PUDDING WHY CONFIDENTIALITY AGREEMENTS ARE NECESSARY Hypothetically speaking, you learn that your former chef has borrowed your well-recognized restaurant concept and opened his own eatery within proximity to yours. Suddenly, you find that your unique concept of a “pudding-only” menu is now being duplicated in northern California. A bit far-fetched, yes, but stranger things have happened.

Punitive Damages 3 of 3

Part Three in a Three-Part Series PUNITIVE DAMAGES AFFILIATED WITH HOTEL MANAGEMENT AGREEMENTS A Case Study of Agency Law, Hotel Management Agreements, and Punitive Damage Awards Citing the Cases of 2660 Woodley Road Joint Venture v. ITT Sheraton Corporation v. P.T. Karang Mas Sejahtera v. Marriott International Inc., et al By Meg McDonough March 2008 President, Luxury Hospitality Consultants, LLC The next case that will be discussed is 2660 Woodley Road Joint Venture v. ITT Sheraton Corporation (villanova.edu). This case is unique in that it involved the owner’s use of the agency relationship to sue for breach of fiduciary duties and other torts. This case is also unique in that it was a jury trial that resulted in a substantial damage award. Sheraton Operating Corporation, a wholly-owned subsidiary of ITT, had managed the hotel on behalf of Woodley Road (owner) since 1979. In return for its management services, Sheraton was to receive compensation based on a percentage of the gross revenues plus a percentage of net cash flow as an incentive fee. The management contract was …

Punitive Damages 2 of 3

Part Two in a Three-Part Series PUNITIVE DAMAGES AFFILIATED WITH HOTEL MANAGEMENT AGREEMENTS   A Case Study of Agency Law, Hotel Management Agreements, and Punitive Damage Awards Citing the Cases of Pacific Landmark Hotel, Ltd. v. Marriott Hotels, Inc. v Government Guarantee Fund of the Republic of Finland v. Hyatt Corporation By Meg McDonough March 2008 President, Luxury Hospitality Consultants, LLC The next case discussed is Pacific Landmark Hotel, Ltd. v. Marriott Hotels, Inc. [Renard and Kristi]. This case is unique in that the management agreement specifically stated that Marriott’s agency was “coupled with an interest and may not be terminated by owner until the expiration of the term of the agreements.” The stated term of the management agreement was sixty years. At about the same time that the management agreements were put in place, the owners of the hotel secured loans with several of Marriott’s subsidiaries totaling approximately $23 million. The lenders secured these loans by deeds of trust and collateral assignments of the management agreements. In effect, the security for these loan transactions …

Punitive Damages 1 of 3

Part One in a Three-Part Series  PUNITIVE DAMAGES AFFILIATED WITH HOTEL MANAGEMENT AGREEMENTS    A Case Study of Agency Law, Hotel Management Agreements, and Punitive Damage Awards Citing the Cases of Woolley v. Embassy Suites March 2008 By Meg McDonough President, Luxury Hospitality Consultants, LLC In February 2008 Jim Butler, Hotel Lawyer and Author of http://www.HotelLawBlog.com, examined the legal intricacies in a breach of contract lawsuit involving the Ritz-Carlton Bali Hotel and the Four Seasons Resort on Bali. It’s an interesting case and one which illustrates the impact of hotel management agreements, contractual obligations, and the fiduciary duties of hotel management companies. As part of my certification in Hotel Management (University of South Florida – Sarasota), I wrote the following case study on hospitality law as it affected not only the above-noted parties but also others with somewhat similar outcomes vis-à-vis punitive damages. The final outcome fell on how the courts interpreted management agreements as agency agreements and applying applicable agency law. First of all, is the discussion of the court’s interpretation of management agreements …