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 Roosevelt Hotel Sold for for $36 million Based on 1979 Irrevocable Option to Purchase the 1,040 Room Hotel 
Roosevelt Hotel Corporation Prevails Over Milstein Family 
NEW YORK, May 31, 2000 - The Roosevelt Hotel Corporation, NV, a company owned by Pakistan International Airlines and Prince Faisal of Saudia Arabia, represented by Chadbourne & Parke LLP, won a major battle against Letoh Associates, a Milstein family partnership, in a lawsuit over the purchase of the Roosevelt Hotel.  Supreme Court Justice Ira Gammerman ruled that the purchase contract clearly stated that the Roosevelt Hotel Corporation was entitled to a fixed-price purchase of the hotel, and was not responsible for $23 million in mortgage indebtedness as the Milstein�s had claimed.

The Milstein family leased the Roosevelt Hotel to the Roosevelt Hotel Corporation in 1979 with the irrevocable option to purchase the hotel for $36 million.  Chadbourne & Parke LLP represented the Roosevelt Hotel Corporation in the preparation of the original lease/sale agreement.  When the Roosevelt Hotel Corporation exercised its option to buy, the Milsteins demanded an additional $23 million to satisfy mortgage indebtedness.  The Roosevelt Hotel Corporation filed suit claiming breach of contract.

After the trial, Supreme Court Justice Ira Gammerman found in favor of the Roosevelt Hotel Corporation, concluding the litigation �was simply the culmination of Letoh�s [Milsteins�] post hoc efforts to discover and exploit a colorable loophole.�  In the opinion, the Court found the contract to be unambiguous, and held that even if there were ambiguity, testimony at trial and contemporaneous documentation showed that both parties had agreed to a fixed selling price.  Justice Gammerman further found that the testimony on behalf of Letoh was �contrived or lacking in meaningful detail.�  

Howard Milstein, the Milstein family�s long-time financial advisor, Oded Aboodi, and Milsteins� attorney, Marty Blackman, were the only witnesses called by Letoh. Although the option price for the Roosevelt Hotel, located at Madison Avenue and 45th Street, is set at $36 million, its present value is estimated to be many times that amount.  The Chadbourne & Parke team which represented the Roosevelt Hotel Corporation in its litigation against Letoh Associates included Donald Stauber, Eric Welsh, and Beth Diamond.

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Contact:
Roosevelt Hotel Corporation, NV

 
Also See: IIan Schrager and NorthStar Acquire St. Moritz Hotel; Historic Properly Will be Redeveloped and Re-Introduced as Chic, Urban Hotel / April 1998 
Manhattan Lodging Report / Hotel Transactions & Developments / Ernst & Young LLP / Jan 2000 

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