OTK Associates LLC, the largest shareholder of Morgans Hotel Group Co. is taking its dispute with the company to court.
Bloomberg reported that OTK Associates filed a petition for an injunction in a Delaware court alleging that Morgans Hotel Group Co., New York City, gave inadequate notice of its March 30 directors’ committee meeting. Meanwhile Jason Kalisman, a founding member of OTK Associates, has filed a lawsuit against Morgans seeking to invalidate the deal to sell its stakes in the 195-room Delano South Beach and The Light Group to The Yucaipa Companies. The agreement also includes a US$100 million rights offering to reduce its debt and preferred stock obligations by US$230 million.
Morgans Hotel Group Co. has rebuffed OTK Associates’ allegations.