Update On Lawsuit Between Starwood And Le Parker Meridien & Parker Palm Springs

by John Ollila on March 8, 2013

This lawsuit between Starwood and Le Parker Meridien & Parker Palm Springs will provide lots of documents and entertainment in the coming months. I first wrote about this based on the article on the New York Post back in January and made a follow up post once I got hold off the actual lawsuit.

spg-vs-parker

Le Parker Meriden and Parker Palm Springs have now filed for the dismissal of this lawsuit. They have also provided some interesting reading about the original contracts for both of the hotels joining the Le Meridien brand and later amendments for both to participate to the SPG program as well.

spg-fee

The base fee for both of the hotels to be part of the Le Meridien was 1.5% (later 1.25%) of the total room revenue and then there were some incentive fees that varied from 1.25% to 1.5% as well. Both hotels also had to pay 5% SPG fee for qualified guest folio of the SPG members staying at their properties.

spg-wire

This update also reveals that Parker had wired $1.004.653.00 to Starwood, as to compensate with SPG issues. Sneaky way for Parker to remit the payment this way instead of mailing a check. The recipient cannot refuse a wire. It is quite eye opening to read that Starwood didn’t accept this as a payment for the “issues” and would continue to pursue this issue in court. This letter was sent before the actual lawsuit was filed.

parker-palm-springs

Here’s the PDF of the original agreement between Le Parker Meridien and Le Meridien Chain:

Download (PDF, 3.97MB)

Here’s the PDF of the amendment that shows SPG program fee:

Download (PDF, 1.84MB)

Here’s PDF of the letter that Starwood had sent to Parker regarding the wired moneys and other issues:

Download (PDF, 871KB)

Conclusion

It is somewhat surprising that Starwood is willing to bring all the dirty laundry about their franchise agreements and program fees to the public knowledge by these court filings.

The employees of these two hotels must have been busy at falsifying the occupancy reports, as the monetary amount that was over paid by SPG exceeded a million dollars. This also hows how poorly SPG handles their internal auditing when it comes award night reimbursements to their properties.

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