Baha Mar in Legal Dispute After Hotel Company Pullout

Thursday 01st, May 2014 / 12:54 Published by

Baha Mar legal dispute after hotel company pullout

Morgans Hotel Group Management moved to terminate its hotel management agreement with Baha Mar and has sought a temporary restraining order over an alleged “retaliatory” attempt by the resort to gain access to $10 million that it claims Baha Mar was not entitled to.

In court documents filed in the New York State Supreme Court obtained by Guardian Business, which list Morgans Hotel Group Management as the petitioner in the matter and Baha Mar and Deutsche Bank Trust Company Americas as respondents, it is said that Morgans Management notified Baha Mar on March 26, 2014 that its 20-year hotel management agreement (HMA) with Baha Mar “would terminate effective 30 days later”.

This came after Baha Mar was allegedly unable to fulfill what was required of it under the agreement.

These requirements of Baha Mar included obtaining a “non-disturbance agreement”, which would have ensured that in the event of a default or foreclosure under the Baha Mar loan, the lenders would not take certain actions to interfere with the operation of the hotel by Morgans Hotel Group Management. On March 20, 2014, Baha Mar allegedly advised Morgans it had been unable to obtain the non-disturbance agreement after being given almost three additional years to do so, according to the court documents.

The HMA entered into between Baha Mar and Morgans Hotel Group Management on July 31, 2011, for Morgans to develop and operate the 300-room Mondrian at Baha Mar hotel, had called on the hotel management company to put aside $10 million in Baha Mar’s name in the form of a letter of credit with Deutsche Bank.

According to filings by Morgans Hotel Group Management’s attorneys, this money, termed “key money”, was to be released in three installments to Baha Mar beginning 180 days prior to the opening of the hotel, but would “automatically be released” to Morgans on the effective date of any termination of the contract – April 25, 2014 in this case – should such a termination occur.

In April 23, 2014 court filings in support of an emergency restraining order stopping the transfer of the $10 million letter of credit from Deutsche Bank to Baha Mar until an arbitration panel could determine the merits of Morgans Hotel Group Management’s underlying dispute, Christina Hassan, senior vice president and associate general counsel of the company, stated that Thomas Dunlap, president of Baha Mar, sent a letter to Deutsche Bank “attempting to draw down the entire $10 million letter of credit”. Morgans was of the view that this move was contrary to the terms of the HMA.

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6 Comments on “Baha Mar in Legal Dispute After Hotel Company Pullout

  • From the beginning, it has been one problem after another with this project. And as the crime increases, showing investors that they are buying into a future war zone that has already started, it’s a sure winner this project will fail.

    Listen, I have family members working at Atlantis, and they tell me the hotel is not doing good from what they see. The hotel may give you their own numbers showing you that they’re doing great, but the workers are the ones who see it, feel it, and live it. So what makes this new hotel think they will do better? I bet you this hotel will fail, the owners will bailout and once again, the Bahamian people will be the ones left holding the empty bag. And why is this going to happen you ask me? Because our government won’t/can’t control what is happening in the streets, so they are taking whatever they can before it all falls apart. And it will fall apart soon if something is not done. Tell me, my brothers and sisters, can’t you feel it getting worse? My grandmother won’t even sit on the porch anymore, she thinks she going to get drive-by shot! And I tell her, grandmother, you’re not a gangster, who the hell would want to kill you!? And you know what she said “Pipo”, that’s what she calls me,”Pipo”, if they dump the burnt remains of a human behind the house of the Lord, there is no one safe on this Island”.

    I want all of who are fed-up with this government and crime to look up in search on your computer “The salt march”. And after you read it, if you care about what’s happening in our country, I’ll tell you how we are going to use the same methods, but for a different reason.

    • Let's march, Pipo!

      Wow, this is the greatest form of protest in history against British taxes and oppressive government! Pipo, who are you, I would love to meet and march with you. I’d rather die a free and happy woman, than to be oppressed into a depressing state of mind! When are we going to march from one end of the island to the other side and then to the prime minister’s office!?

    • When do we march?

      OMG! Mahatma Gandhi walked 240 miles from his town to the sea, started with 78 people and when he arrived at the sea their was 100,000 people marching with him, which 20,000 were jailed; amazing! Pipo, I see what your plan is, how are we going to do this and when?

    • Holy @#$%, can you imagine the whole population of Nassau marching to the steps of the PM’s office? This would make international news, the World would watch and wait as they are watching and waiting for that missing air plane.

    • This will never take off, Bahamians are too lazy and divided. A great idea though, it can only happen with people who care, and Bahamians don’t even care about themselves. Sorry Pipo, you are wasting your time and putting your life on the line for a country who doesn’t care anymore.

    • Shamefull crooks

      When are we going to march against this bully of a government? I know families who are eating canned dog food to survive while these crooks live the high life.


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