Hotel Online  Special Report


 Starwood Hotels & Resorts Victorious in an Arbitration Relating to the
Ownership and Management of the Westin St. Francis Hotel and
the Westin Michigan Avenue Hotel
WHITE PLAINS, N.Y. - May 11, 2006 -- Starwood Hotels & Resorts Worldwide, Inc. (NYSE:HOT) announced today a major victory in an arbitration relating to the ownership and management of two Westin hotels. A three-member arbitration panel issued a unanimous ruling on April 28, finding that Starwood and Westin Hotels Limited Partnership ("WHLP") had prevailed in a 17-month long arbitration proceeding and were not liable for any portion of the more than $200 million Kalmia Investors, LLC ("Kalmia") alleged as damages to the WHLP partnership in which it is an investor. 

Kalmia is the largest limited partner of WHLP, which owned both the Starwood-managed Westin St. Francis Hotel in San Francisco and the Westin Michigan Avenue Hotel in Chicago before those properties were sold in April 2000 and January 2005, respectively. Kalmia asserted numerous claims against WHLP, Starwood and Westin Realty Corporation ("Westin Realty"), the general partner of WHLP, and sought lost profits, disgorgement of management fees, punitive damages and the alleged lost value from the sale of the two hotels in question. 

The panel denied Kalmia's claims, stating, "Kalmia failed to carry its burden of proving, separately or in combination, misconduct (by Starwood, WHLP, or Westin Realty) violative of any contractual, fiduciary or other legal duty owed to Kalmia by those parties," and that, "the total damages sought by Kalmia were inflated, unsupported, and lacking in credibility." The panel also characterized Kalmia's main theory of damages as "entirely speculative and highly improbable." 

"This is an important victory for us," said Kenneth S. Siegel, Chief Administrative Officer and General Counsel of Starwood Hotels. "This ruling is a major validation of Starwood's business practices and proves that we honored our duties to all parties involved and acted in the utmost good faith. We look forward to continuing to successfully manage the Westin St. Francis Hotel and the Westin Michigan Avenue Hotel." 

"The panel's decision vindicates Starwood's management of these two great hotels," said William A. Brewer III, partner at Bickel & Brewer and lead defense counsel for Starwood. "We are pleased that the panel agreed and denied Kalmia's claims in all respects." 

Kalmia was represented by Cecelia L. Fanelli, Albert M. Appel, and David Bowles of Stroock & Stroock & Lavan LLP. 

About Starwood: 
Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with approximately 850 properties in more than 95 countries and 145,000 employees at its owned and managed properties. Starwood(R) Hotels is a fully integrated owner, operator and franchisor of hotels and resorts with the following internationally renowned brands: St. Regis(R), The Luxury Collection(R), Sheraton(R), Westin(R), Four Points(R) by Sheraton, W(R), Le Meridien(R) and the recently announced Aloft(SM). Starwood Hotels also owns Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. For more information, please visit


Starwood Hotels & Resorts
Nadeen N. Ayala, 914-640-8259

Also See: LaSalle Hotel Properties Acquiring the 751 room Westin Michigan Avenue in Chicago, Illinois for $215.0 million / January 2006
BRE / St. Francis L.L.C Acquires The 1,192 Room Westin St. Francis for $243 Million / Westin to Continue Management of the Historic Property / Jan 2000
The 1,195 room Westin St. Francis San Francisco Being Acquired by Strategic Hotels & Resorts, Inc. for $440.0 million / April 2006


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