Downtown Hilton management dispute widens
BY TED GRIGGS
Advocate business writer
June 14, 2012
The ongoing fight between the downtown Hilton and former manager Camm Morton will go to a second arbitration, with the latest dispute centered on whether Morton should have returned to manage the hotel.
“The first arbitration said they have to pay Camm through the end of his contract, even if he’s not managing the hotel,” said Stephen Babcock, Morton’s attorney. “The second arbitration — they told him to stay away from the hotel, and then after 30 days they put him in default for not managing the hotel. It’s pretty absurd.”
Babcock said the arbitration is set for Friday at the Jones Walker law firm.
Claude Reynaud Jr., the attorney for the hotel owner, Commercial Properties Realty Trust, said he could not comment on the second arbitration.
The contract called for arbitration because the process is private, Reynaud said.
Last year, an arbitration panel ruled that the hotel’s owner, Baton Rouge Area Foundation’s Commercial Properties Realty Trust, wrongfully terminated a management agreement with Morton’s company, Ashby Hospitality LLC. The panel said Commercial Properties had to pay Morton close to $2 million, more than a year’s worth of management fees and interest.
Commercial Properties argued that Ashby had breached the contract and wasn’t owed the money.
The company refused to pay. Morton’s company sued in 19th Judicial District Court, and Judge Wilson Fields confirmed the arbitration panel’s award.
Commercial Properties filed an appeal with the 1st Circuit Court of Appeal.
“At the end of the tumultuous relationship between Ashby and the hotel, Ashby undertook some actions that were deliberate and in bad faith,” Reynaud said. “For example, contacting our principal banker, contacting Hilton corporate and others. Those actions were deliberate and only intended, in our view, to harm us,” Reynaud said.
Reynaud said Commercial Properties is asking the appeal court to reduce the amount awarded to Ashby.
Commercial Properties shouldn’t owe Ashby any management fees from the point where Ashby breached its contract through the acts of bad faith, Reynaud said. If the appeals court rules in Commercial Properties’ favor, it would cut the amount awarded to Ashby by at least half.
Babcock said the long-running dispute comes down to money.
“They do not want to pay Camm. Period,” Babcock said.
Meanwhile, Commercial Properties has appealed the first arbitration panel’s award and Fields’ ruling to the 1st Circuit Court of Appeal.
Commercial Properties has alleged that the arbitrators exceeded their authority in issuing the ruling, Babcock said. The 1st Circuit will hear oral arguments later this summer.