Hotel Online 
News for the Hospitality Executive

David S. Feder, Former President of PGA National Resort & Spa,
 Sues PGA National; Claims Employment Agreement Called
 for $8.5 million Kicker if Resort Sold

By Alexandra Clough, The Palm Beach Post, Fla.McClatchy-Tribune Business News

Aug. 24, 2006 - David S. Feder may be gone as president of the PGA National Resort & Spa, but he's not letting former PGA owner E. Llwyd Ecclestone forget him.

Feder has filed a lawsuit against PGA National Golf Club and PGA Resort, which together owned PGA National; Ecclestone; and General Management Services, a resort management company. The lawsuit, filed Aug. 15 in Palm Beach County Circuit Court, claims Ecclestone lied to Feder about the pending sale of the Palm Beach Gardens resort, and then cut Feder out of his share of the profits.

The lawsuit offers a peek into the big-money world of resort management. Feder, a respected hotelier who had a long, successful career as head of the storied Boca Raton Resort and Club, was expected to revitalize the dated PGA National when he joined it last year.

Feder was paid $500,000 a year in salary to oversee the property's hotel, five golf courses, spa and conference center, according to an employment agreement contained in the lawsuit.

But the employment agreement also contained something else: a kicker clause that called for Feder to receive 10 percent of the sales profits, less $2.5 million, if the resort ever sold.

On Aug. 16, the day after Feder filed his lawsuit, Ecclestone confirmed he had sold PGA National to Walton Street Capital LLC of Chicago. The price wasn't disclosed.

However, Feder's lawsuit says he's entitled to $8.5 million from the sale. If the formula in Feder's employment agreement is accurate, that means that the resort posted a profit of at least $110 million.

Neither Ecclestone nor Feder, now president of the Fontainbleau Resort in Miami, returned calls seeking comment Wednesday. A PGA National spokeswoman said she wasn't familiar with the lawsuit.

Even though Feder was paid a handsome salary, working for Ecclestone was no picnic, the lawsuit said. Ecclestone "micro-managed (Feder's) work, dealt with Mr. Feder's subordinates behind his back... and wrongly accused (Feder) of misconduct," the lawsuit says.

Feder and Ecclestone talked about these issues in March, and they agreed Feder would resign in a few months, according to the lawsuit. At that point, Ecclestone asked Feder to sign a new "transition" agreement. But this contract did not contain the provision giving Feder a profit participation if the resort sold.

Feder's lawsuit says that, before he signed, he asked Ecclestone about rumors the resort was in play.

"Ecclestone denied the rumors point blank, and claimed he had no intention of selling the resort," the Feder suit alleges.

But the suit says Ecclestone actually hired a broker to sell the resort as far back as January and may even have had a signed letter of intent with a buyer when he and Feder met in March.

Feder's lawsuit says Ecclestone withheld news of the resort's pending sale to "induce" Feder to sign the transition agreement. Feder abruptly left PGA National on June 30.


To see more of The Palm Beach Post -- including its homes, jobs, cars and other classified listings -- or to subscribe to the newspaper, go to

Copyright (c) 2006, The Palm Beach Post, Fla.

Distributed by McClatchy-Tribune Business News. For reprints, email, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

To search Hotel Online data base of News and Trends Go to Hotel.OnlineSearch
Home | Welcome| Hospitality News | Classifieds| One-on-One |
Viewpoint Forum | Ideas&Trends | Press Releases
Please contact Hotel.Onlinewith your comments and suggestions.