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1-11-Cv-00754 Marriott v Aqua Complaint

1-11-Cv-00754 Marriott v Aqua Complaint

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Complaint filed in federal court in Honolulu December 12, 2011 describing actions related to an alleged attempt to take over a hotel in Waikiki
Complaint filed in federal court in Honolulu December 12, 2011 describing actions related to an alleged attempt to take over a hotel in Waikiki

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Published by: scribd.hi.lgns8853 on Dec 14, 2011
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01/31/2012

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FILED IN THE
UNITED
STATES DISTRICT
COURT
DISTRIC
T
OF HAWAII
DEC 12
*
at
o'clock and
n.
 M.
SUE BEIT1A, CLE K
Of Counsel:
ALSTON HUNT FLOYD
86
ING
Attorneys at Law
A Law Corporation
PAUL ALSTON
1126
LOUISE K. Y. ING
23941001 Bishop Street
Suite 1800
Honolulu, Hawaii 96813
Telephone:
(808) 524-1800
Facsimile:
(808) 524-4591
E-mail:
linggahfi.corn
Attorneys for Plaintiff 
MARRIOTT HOTEL SERVICES, INC.IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
1 1
0 0 7 5 4 SOM ist4i(
MARRIOTT HOTEL SERVICES,
ease No.
INC.,
COMPLAINT; DEMAND FOR
JURY TRIAL; SUMMONS
Plaintiff,
VS.
AQUA HOTELS AND RESORTS,INC., AQUA HOTELS &
RESORTS, LLC, MODERN
MANAGEMENT SERVICES, LLC,
W. CHRISTIAN OLES, and DOEDEFENDANTS 1-10,
Defendants.
COMPLAINT
Plaintiff Marriott Hotel Services, Inc. ("Marriott" or "Plaintiff"),
b
y
its i
melersicrned counsel as and for its Cornnlairo-
acrni-no+
 
Defendants Aqua Hotels and Resorts, Inc. (Aqua Inc.), Aqua Hotels
86 Resorts, LLC (Aqua LLC) (collectively, "Aqua"), Modern
Management Services, LLC ("Modern"), Mr. W. Christian Oles("Oles"), and Doe Defendants 1-10 alleges as follows:
NATURE OF LAWSUIT
1.
In the middle of the night on August 28, 2011, Aqua
initiated a forceful and hostile takeover of The Waikiki EDITIONhotel in Honolulu, HawaiTi. The Waikiki EDITION, a hotel being
managed by Marriott pursuant to a long-term contract, opened in
September 2010 to rave reviews and international acclaim.Designed by famed hotelier Ian Schrager in partnership with
Marriott, the hotel was the first of Marriott's new EDITION brand to
open. Yet while Marriott was winning awards for the hotel and
investing hundreds of millions of dollars to develop the EDITION
brand, its competitor Aqua was secretly planning a coup.
2.
It had been publicly reported that Marriott was at oddswith the hotel's owner and that their disputes would be decided by
a New York court. It was also public knowledge that Marriott'scontract with the owner was for an initial term of thirty years, with
less than one year completed. That management agreement was
 
estimated to bring Marriott management fees of over $65 million
dollars over thirty years. Marriott also had the unilateral right to
two ten-year extensions, worth millions of dollars of additionalmanagement fees. After learning of the dispute between Marriottand the owner, Aqua saw a multi-million dollar opportunity.
3.
Like Marriott, Aqua is a hotel management company.
Aqua manages approximately seventeen hotels across five islands inHawaii, largely consisting of midlevel properties and Waikiki"condotels" that appeal to the budget traveler. Named to PacificBusiness News' fastest 50 growing companies in Hawaii for threeconsecutive years, Aqua has embarked on a strategy of fast growth
in recent years in attempt to stake a claim as one of Hawaii's majorhotel operators. Its new CEO, Benjamin Rafter, announced in 2008
his intention to "double in size within the next couple of years," and
to "capitalize on the current downturn as hotel owners seek more
effective options to current management."
4.
In The Waikiki EDITION, Aqua saw the luxury hotel its
portfolio lacked. If it could persuade the owner to sign up withAqua, it could capitalize on the dispute with Marriott and instantly
compete in the luxury market without ever having to develop or

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