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HospitalityLawyer.com - Real Estate Newsletter February 2012

publication date: Feb 25, 2012
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author/source: HospitalityLawyer.com
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HospitalityLawyer.com - worldwide provider of legal, safety, and security solutionsReal Estate Newsletter

February 2012 . Volume III, Issue 1

In this edition:


ManattSalameh v. Tarsadia Hotels: An Important Legal Case for Condominium-Hotel Developers is in the Hands of the Ninth Circuit Court of Appeals, by Jason Taketa

Condominium hotels are an integral component of the hospitality industry, serving both the needs of project developers, and the desire of real estate buyers to own unique vacation properties. In the past decade, condominium hotel projects became increasingly common throughout the country. However, in the wake of the financial crisis of 2008 and the accompanying downturn in commercial and residential real estate, there have been numerous lawsuits filed by condominium hotel buyers seeking to rescind their purchases, often arguing that the condominium hotel units were improperly sold as "securities" under federal and state securities laws.

To date, based on current legal precedent, plaintiffs in these cases have had little success persuading trial courts to agree with their securities law arguments. However, Salameh v. Tarsadia Hotels, which is currently pending in the United States Court of Appeals for the Ninth Circuit, is the first of these cases to reach the federal appeals level. Although there are many different ways in which the Ninth Circuit could rule, there is a risk that the Ninth Circuit will issue a broad opinion with far reaching ramifications on the resort property industry as a whole.

In this article, we summarize the current state of the securities laws as they apply to condominium hotels, as well as the basic issues under consideration in Salameh. Finally, we analyze the potential ramifications of an adverse decision by the Ninth Circuit and our thoughts on the case's impact on the hospitality industry going forward. Read more

The Lessons of Sheraton v. Castillo Grand, By Irvin W. Sandman and Russell C. Savrann, Members of the Global Alliance of Travel, Tourism, & Hospitality Attorneys

Castillo Grand developed a 5 diamond ocean-front resort and residences project in Fort Lauderdale and sought to flag it as a St. Regis.  Castillo entered into the usual package of branded management agreements with Starwood’s management subsidiary, Sheraton Operating Corporation.  On November 18, 2011, after 5 years of litigation between Castillo and Sheraton, the New York state court in Westchester County entered its 83 page decision.  The result:  the court ordered judgment for Castillo and against Sheraton for over $30 million

What happened in the case and what lessons can be learned? Read more

Industry Resources

Visit the GATTHA Library to trend issues or to receive a primer on Real Estate Topics. Relevant real estate white papers include:

  • Mergers and Acquisitions (New Addition!)
  • Resorts and More: Legal Trends in Formation, Governance and Operations
  • Sample Receivership Order
  • Financing the Project
  • Resort Operations & Liability Issues
  • The Economics of the Deal

Visit our On-Demand Webinar Library to view webinars on Real Estate Development & Transactions. Webinars include:

     

     


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