HONOLULU, Aug. 31, 2011 /PRNewswire via COMTEX/ --
M Waikiki LLC, a hotel investment company, today announced that is has filed for Chapter 11 bankruptcy protection. The filing allows the company to reorganize in an effort to protect its investment in The MODERN Honolulu, a 353-room luxury hotel.
The filing follows a court decision this morning granting a temporary restraining order to allow Marriott International Inc. ("Marriott") to resume its operation of the property. The Chapter 11 filing now allows M Waikiki ("Owner") to reaffirm the termination of the management agreement with Marriott and continue to employ new management at the property. M Waikiki LLC had installed new management this weekend at The MODERN Honolulu, formerly known as the Waikiki Edition.
"We respectfully disagree with today's court decision and remain confident that the Owner acted within its rights terminating its contract with Marriott," said William A. Brewer III, partner at Bickel & Brewer and lead counsel for Owner. "In any event, the Owner has filed for bankruptcy protection, which will permit it to continue the operation of the hotel under its present management with Modern Management Services."
Modern Management Services was installed as the manager at the property on August 28, 2011. The hotel was renamed, guests were advised, and hundreds of hotel staff members were offered employment. New management remains in place.
Today's ruling and reorganization announcement do not affect Owner's claims against Marriott, pursuant to which Owner seeks tens of millions of dollars in damages.
"In our view, filing for bankruptcy protection is the only prudent option for protecting our investment in this asset," said Damian McKinney, principal of M Waikiki LLC. "We look forward to reorganizing as a new corporate entity, continuing the employment of a new management company, and making this a leading lifestyle hotel for guests and employees."
About M Waikiki LLC:
M. Waikiki is a Hawaii limited liability company with its principal place of business located in San Diego, California. It is a special purpose entity, having approximately 75 indirect investors, which was formed to acquire the Hotel.
* * * * *
PBN: Marriott managers ready to take back Waikiki Edition hotel
Marriott executives, including the top executive for the Hawaii region, lined up outside The Waikiki Edition hotel Wednesday afternoon in anticipation of regaining management control of the hotel.
A New York judge ordered that the owners of the hotel, M Waikiki LLC, reinstate Marriott as the management company at 2:30 p.m. Wednesday, three days after the Bethesda, Md.-based hotel company was ousted and replaced with an affiliate of Honolulu-based Aqua Hotels & Resorts.
Executives waiting outside the hotel included Waikiki Edition General Manager Michael Rock and Chris Tatum, Marriott International’s area vice president for North Asia, Hawaii and South Pacific. Private security guards were posted at all entrances to the hotel, which had been rebranded the Modern Honolulu.
WSJ: Fierce Fight Over Hawaiian Hotel Escalates
However, the jockeying continued almost immediately.
On Wednesday after the court order was issued, the hotel owners filed for bankruptcy protection in Hawaii, they said in a court response in New York. The owners told the court that filing for bankruptcy protection allowed them to continue operating the hotel because it prevented enforcement of previous legal actions.
As of late afternoon in Hawaii, an attorney for the owners said their management group, Aqua, remained in control of the hotel. Russell Pang, a spokesman for Aqua at the hotel, said that a group of Marriott management employees had come to the property but that he believed they had left.
KHON: Owner files for bankruptcy as dispute over Waikiki Edition continues