Investors Ashkenazy Acquisition Corp. and Saudi Prince Alwaleed bin Talal’s Kingdom Holding Co., who want to purchase the iconic Plaza Hotel in New York City, have filed a lawsuit against the building’s majority owner for supposedly defaulting on an agreement that would allow the investors to match any other offers given for the property.
According to a complaint filed on Friday, May 18, in New York State court, the Plaza Hotel’s 70 percent stake holder, Sahara US Corp., has been discussing negotiations with other parties, while demanding a second deposit. Earlier this month, minority investors Ashkenazy and Kingdom used their right of first refusal to decline a bid to buy the property for $600 million, as they work to purchase it themselves.
According to Bloomberg News, “The clash between the investors is another twist in a years-long sales process for the 111-year-old building at the corner of Fifth Avenue and Central Park South. Sahara US is an entity tied to Sahara India Pariwar, which has been attempting to sell its stake amid troubles faced by its chairman, Subrata Roy, who has been ordered to return billions of dollars to investors.”
Sahara US president Sandeep Wadhwa said that the company does not agree with the suit’s allegations and will file a response in court.
Earlier this month, Sahara agreed to sell the Plaza for $600 million to Dubai-based family office White City Ventures’ founder Shahal Khan and Kamran Hakim of Hakim Organization, a landlord in New York. June 25 was scheduled as the day the deal would be finalized. Plans of using the hotel to launch a worldwide brand was also discussed.
In the complaint, the combined 25 percent stake holders in the Plaza, Ashkenazy and Kingdom, accuse Khan and Hakim of interfering with their own flight to obtain funding to purchase the property, by seeking financing for their own buy with Sahara’s knowledge.
Bloomberg reports, “Ashkenazy is willing and able to fund the deal if Kingdom is unable to contribute, according to a person with knowledge of the matter, who asked not to be named because the transaction is private. Some people close to the deal are concerned that Kingdom might not have access to capital after Alwaleed was detained at the Ritz-Carlton in Riyadh for 83 days through January, in what Saudi officials described as an anti-corruption crackdown. Ashkenazy and Kingdom asked the judge to compel Sahara to sell them the property, as well as to execute an appropriate agreement for the sale on the same terms as the initial deal granting them right of first refusal. They also asked for a court order declaring a second deposit isn’t required.”
By Charles Bernstein