Pryor Cashman LLP is pleased to announce that its client, Castillo Grand LLC, has obtained a $44 million award against Starwood Hotels’ subsidiary Sheraton Operating Corp. The substantial ruling was a result of Sheraton’s multiple breaches of its management contract with the owners and developers of the former St. Regis Hotel and Resorts. The parties had entered into a contract to bring New York's famed St. Regis Hotel brand to Ft. Lauderdale's Gold Coast, making it one of the first high-end, luxury hotel and condominium resorts in the beachside community at the time.
At the crux of the dispute was the absence of “St. Regis-style” brand standards in the design and construction of the hotel, caused in large part by the revolving door of senior leadership within the Starwood organization. There were four St. Regis regime changes during the design and construction of the hotel and with each change Starwood leadership imposed a new direction in the design for almost every facet of the hotel. The disorganization created ever-evolving interior building specs for the St. Regis brand and a moving design and construction standard that led directly to extensive construction delays and vast cost overruns for Castillo Grand. By the time the hotel opened in 2007, it was millions of dollars over budget, two years behind schedule, and the Florida real estate market was cratering to historic lows.
Its good to see Franchisees taking action against unfair Franchise practices.
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