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Brewer, Attorneys & Counselors has represented internationally known hotel management companies, owners, developers, franchisors, and investors in some of the highest-profile cases in the industry.
Not only has the firm’s work in this area changed the state of the law, but it has resulted in the formulation of creative solutions to myriad problems confronting the industry.
For example, in M Waikiki LLC v. Marriott International, the firm represented the owner of a Honolulu, Hawaii, resort in connection with the 2011 termination of a long-term hotel management agreement with Edition, the joint lifestyle hotel brand of Marriott International and Ian Schrager.
The lawsuit alleged that after the hotel was opened as the first Edition brand hotel in late 2010, it suffered from poor occupancy, a brand name with virtually no identity, and Marriott’s unwillingness to control expenses. According to the owner, during a three-month period of May to July 2011, the hotel sustained staggering operating losses of $1.9 million.
“We believed that promises made during the launch of Edition were broken - leaving our client with significant damages which were further compounded by Marriott’s inability to effectively manage the property. Therefore, our client sought to remove Marriott from the management of the hotel.”
The lawsuit was filed by owner M Waikiki LLC in New York Supreme Court on May 26, 2011.
As a result, Edition was ousted from the property and a new management company was installed at the resort. The firm then represented the owner as special litigation counsel in bankruptcy, including a weeklong estimation hearing. The firm also represented its client’s interests in the public arena, generating favorable media coverage from outlets such as The Wall Street Journal, Reuters, and local Hawaii news outlets.
In August 2011, The Wall Street Journal reported that the owner made a dramatic, early morning move to install new management. The firm maintained that the owner had the legal right to take action, a peaceful transition that positioned the hotel for future success.
The hotel was renamed The Modern Honolulu. Brewer, Attorneys & Counselors directed a PR campaign to promote the new direction of the hotel. That campaign helped the client generate local and national visibility for the property, leading to increased exposure, reservations, and business opportunities.
Industry trade publication Travel Weekly highlighted the case in an article about hotel owners ousting hotel operators in high-profile hotel management disputes. In that article, Brewer commented that with many high-profile legal decisions going against major brands, owners may now feel more comfortable with going to court to push out faltering managers.
The case helped establish the rights and responsibilities of all parties involved in these types of disputes.
