|
|
|
|
Document Preview Settlement Agreement |
||||
|
|
||||
|
Click "Add to Cart" button to purchase document. |
||||
|
|
||||
|
Title: |
Settlement Agreement |
|||
|
Entities: |
Hospitality Properties Trust; Host Marriott Corp.; Host Marriott, LP; Marriott International Inc.; Marriott Residence Inn II Limited Partnership; Milbank, Tweed, Hadley & McCloy |
|||
|
Date: |
2000 |
|||
|
Size: |
Preview shows 25KB of 217KB total |
|||
|
Price: |
$79 |
|||
|
ID: |
#1312332 |
|||
|
|
||||
|
||||
|
|
||||
|
Start of Preview |
||||
NO. 96-CI-08327
A. R. MILKES AND D. R. BURKLEW, (S) IN THE DISTRICT COURT
on behalf of themselves and all other (S)
limited partners of Courtyard by (S)
Marriott II Limited Partnership (S)
(S)
v. (S)
(S)
HOST MARRIOTT CORPORATION, (S)
MARRIOTT INTERNATIONAL, INC. (S) OF BEXAR COUNTY, TEXAS
CBM TWO CORPORATION, (S)
COURTYARD MANAGEMENT (S)
CORPORATION, HOST (S)
INTERNATIONAL INC., (S)
STEPHEN RUSHMORE and (S)
HOSPITALITY VALUATION (S)
SERVICES, INC. (S) 285th JUDICIAL DISTRICT
-----------------
NO. 98-CI-04092
ROBERT M. HAAS, SR. and (S) IN THE DISTRICT COURT OF
IRWIN RANDOLPH, (S)
JOINT TENANTS, ET AL. (S)
(S)
VS. (S)
(S)
MARRIOTT INTERNATIONAL, (S)
INC., HOST MARRIOTT (S)
CORPORATION, CBM ONE (S)
CORPORATION, CBM TWO (S)
CORPORATION, COURTYARD (S)
MANAGEMENT CORPORATION, (S)
RIBM ONE CORPORATION, (S)
MARRIOTT RIBM TWO (S)
CORPORATION, RESIDENCE (S)
INN BY MARRIOTT, INC., (S)
MARRIOTT FIBM ONE (S)
CORPORATION, FAIRFIELD (S) BEXAR COUNTY, TEXAS
FMC CORPORATION, INC., (S)
MARRIOTT DESERT SPRINGS (S)
CORPORATION, MARRIOTT (S)
DESERT SPRINGS DEVELOPMENT (S)
<PAGE>
CORPORATION, MARRIOTT (S)
HOTEL SERVICES, INC., (S)
MARRIOTT MARQUIS (S)
CORPORATION, MARRIOTT (S)
HOTELS, INC., HOST (S)
INTERNATIONAL, INC., (S)
J.W. MARRIOTT, JR., (S)
STEPHEN RUSHMORE and (S)
HOSPITALITY VALUATION (S) 57TH JUDICIAL DISTRICT
SETTLEMENT AGREEMENT
--------------------
This Settlement Agreement, dated as of March 9, 2000, is made and
entered into by and among the following parties: (i) the representative
Plaintiffs, A.R. Milkes, Donald Burklew, Charles Carey, Linda McGuire-Raskin,
Mortimer Goodkin, Wesley Tinker, Robert M. Haas, Sr., and Marsha Hendler,
individually and on behalf of each of the members of the Courtyard by Marriott
II Limited Partnership ("CBM II LP") Class certified by the Order of the
Honorable Michael Peden, dated June 23, 1998, as modified on July 21, 1998 (the
"Milkes Plaintiffs"), by and through their counsel of record in the lawsuit
styled Cause No. 96-CI-08327; A.R. Milkes and D.R. Burklew v. Host Marriott
Corporation, et al.; in the 285th Judicial District Court, Bexar County, Texas
(the "Milkes Litigation"); (ii) each of the individual named Plaintiffs in the
lawsuit styled Cause No. 98-CI-04092; Robert M. Haas, Sr., et al. v. Host
Marriott Corporation, et al.; in the 57th Judicial District Court of Bexar
County, Texas (the "Haas Litigation"), together with all putative class members
(the "Haas Plaintiffs"), by and through their counsel of record in the Haas
Litigation; (iii) the Palm and Equity Intervenors as defined herein, by and
through their counsel of record in the Milkes and Haas Litigation; and (iv) the
Defendants, Host Marriott Corporation, Marriott International, Inc., CBM One
LLC(successor by merger to CBM One Corporation), CBM Two LLC (successor by
merger to CBM Two Corporation), Host International, Inc., Courtyard by Marriott
II Limited Partnership, RIBM One LLC (successor by
Settlement Agreement - Page 2
merger to RIBM One Corporation), RIBM Two LLC (successor by merger to Marriott
RIBM Two Corporation), Residence Inn by Marriott, Inc., FIBM One LLC(successor
by merger to Marriott FIBM One Corporation), Fairfield FMC Corporation, Inc.,
HMC Desert LLC (successor by merger to Marriott Desert Springs Corporation),
Marriott Desert Springs Development Corporation, Marriott Hotel Services, Inc.,
Marriott Marquis Corporation, Marriott Hotels, Inc., Courtyard Management
Corporation and J.W. Marriott, Jr., by and through their counsel of record in
the Milkes and Haas Litigations. The Milkes Plaintiffs, the Haas Plaintiffs, the
Palm Intervenors, the Equity Intervenors and the Defendants are collectively
referred to as the "Settling Parties." This Settlement Agreement is intended by
the Settling Parties to fully, finally and forever resolve, discharge and settle
the Released Claims, as defined herein, upon and subject to the terms and
conditions hereof.
WHEREAS:
I. RECITALS
--------
A. THE MILKES LITIGATION
---------------------
On June 7, 1996, Whitey Ford and 136 other limited partners in CBM II
LP instituted suit. On September 20, 1996, the suit was amended to include 443
CBM II LP limited partners. By March 17, 1997, approximately 454 CBM II LP
limited partners had joined the Milkes Litigation.
On January 29, 1998, representative Plaintiffs, A.R. Milkes and D.R.
Burklew, filed a class action lawsuit, on behalf of themselves and a proposed
class of current and former CBM II LP limited partners, against certain
defendants. On June 23, 1998, the Court certified the Milkes Litigation as a
Class action pursuant to the Texas Rules of Civil Procedure 42(a) and (b) with
the Class defined as "all limited partners in the CBM II LP as of January 31,
1998; excluding,
Settlement Agreement - Page 3
however, the defendants, their parent corporations, subsidiaries and affiliates,
and their predecessors and successors in interest, and the present officers,
directors, or employees of any defendant or of any predecessor or successor in
interest of any Defendant" (the "CBM II LP Class").
The Court appointed as representative Plaintiffs, A.R. Milkes, D.R.
Burklew, Charles Carey, Mortimer Goodkin, Linda McGuire-Raskin, Wesley Tinker,
Robert M. Haas, Sr. and Marsha Hendler, and by Order dated July 21, 1998, named
as Lead Class Counsel, David Berg and the law firm of Berg, Androphy & Wilson.
The Court further designated, as co-counsel for the CBM II LP Class, Stephen
Hackerman and the law firm of Hackerman, Peterson, Frankel & Manela; David E.
Warden, and the law firm of Yetter & Warden; James L. Branton, and the law firm
of Branton & Hall; James Moriarty and the law firm of Moriarty & Associates, PC;
J. Boyd Page and the law firm of Page & Bacek, LLP; Linda Broocks and the law
firm of Ogden, Gibson, White & Broocks, LLP; Charles E. Dorr and the law firm of
Charles E. Dorr, P.C.; Roy Barrera, Sr. and the law firm of Nicholas & Barrera,
P.C.; and J.A. Canales and the law firm of Canales & Simonson. Lead Class
Counsel and co-counsel are hereinafter collectively referred to as "Plaintiffs'
Counsel."
A Notice of Pendency of Class Action was sent, in a form and manner
approved by the Court (the "CBM II LP Notice of Pendency"), to members of the
CBM II LP Class, advising them of the pendency of the Milkes Litigation and
giving them the right to request exclusion therefrom, and notifying them that
any CBM II LP Class member who failed to request exclusion as provided in the
CBM II LP Notice of Pendency would be bound by any judgment subsequently
rendered therein. Certain limited partners of CBM II LP, namely the Equity and
Palm Intervenors, requested exclusion from the CBM II LP Class. The CBM II LP
Notice of
Settlement Agreement - Page 4
Pendency satisfied the requirements of Texas Rule of Civil Procedure 42
regarding, among other things, the rights of CBM II LP Class members to request
exclusion from the Milkes Litigation, and no additional opportunity to request
exclusion is required.
After opting-out of the CBM II LP Class, on March 11, 1999, Palm Investors,
LLC, as a limited partner in CBM II LP and as an alleged assignee of all right,
title and interest formerly held by certain CBM II LP limited partners, by and
through its counsel of record, R. James George and the law firm of George &
Donaldson, LLP ("Palm's Counsel"), intervened in the Milkes Litigation (the
"Palm Intervenors"). Similarly, on March 25, 1999, Equity Resource Fund X,
Equity Resource Fund XV, Equity Resource Fund XVI, Equity Resource Fund XVII,
Equity Resource Fund XX, Equity Resource Fund XXI, Equity Resource Bay Fund,
Equity Resource Bridge Fund and Equity Resource Pilgrim Fund, by and through
their counsel of record, J. Patrick Deely and the law firm of Cheslock, Deely &
Rapp ("Equity's Counsel"), filed their Plea in Intervention, on behalf of
themselves and as alleged assignees of all right, title and interest formerly
held by certain CBM II LP limited partners (the "Equity Intervenors").
On August 27, 1999, CBM Two LLC, the General Partner of CBM II LP,
appointed a Special Litigation Committee (the "SLC"), consisting of the
Honorable William H. Webster and the Honorable Charles B. Renfrew, to
investigate, review and analyze the facts and circumstances surrounding the
alleged derivative claims asserted on behalf of CBM II LP in the Milkes
Litigation. The SLC retained, as its counsel, Richard C. Tufaro and the law firm
of Milbank, Tweed, Hadley & McCloy, LLP (the "SLC's Counsel").
On January 19, 2000, the Court signed an Order granting J.W. Marriott,
Jr.'s Special Appearance and dismissing him from the Milkes Litigation.
The Milkes Litigation alleges, among other things, that the
Defendants, or some of them:
Settlement Agreement - Page 5
(1) breached and knowingly participated in breaches of fiduciary duties to the
limited partners in CBM II LP and to CBM II LP; (2) defrauded and conspired to
defraud the CBM II LP limited partners and CBM II LP; (3) conspired against the
CBM II LP limited partners and CBM II LP; (4) violated the TEXAS FREE ENTERPRISE
& ANTITRUST ACT OF 1983; (5) breached certain contracts; and (6) tortiously
interfered with certain contracts. Defendants denied all allegations contained
in the Milkes Lawsuit and have raised numerous affirmative defenses thereto,
including, without limitation, the statutes of limitations.
B. THE HAAS LITIGATION
-------------------
On March 16, 1998, Robert M. Haas, Sr. and Irwin Randolph, joint tenants,
et al., filed suit against Defendants, Marriott International, Inc., Host
Marriott Corporation, CBM One LLC (successor by merger to CBM One Corporation),
CBM Two LLC (successor by merger to CBM Two Corporation), Host International,
Inc., Courtyard by Marriott II Limited Partnership, RIBM One LLC (successor by
merger to RIBM One Corporation), RIBM Two LLC (successor by merger to Marriott
RIBM Two Corporation), Residence Inn by Marriott, Inc., FIBM One LLC (successor
by merger to Marriott FIBM One Corporation), Fairfield FMC Corporation, Inc.,
HMC Desert LLC (successor by merger to Marriott Desert Springs Corporation),
Marriott Desert Springs Development Corporation, Marriott Hotel Services, Inc.,
Marriott Marquis Corporation, Marriott Hotels, Inc., Courtyard Management
Corporation, J.W. Marriott, Jr., Stephen Rushmore and Hospitality Valuation
Services, Inc. Thereafter, on March 18, 1999, Jack L. Walker and Maury F. Weiss,
individually and on behalf of certain limited partners in Courtyard by Marriott
Limited Partnership ("CBM I LP"), filed a Class Action Petition in Intervention
against Defendants. On March 26, 1999, Palm Investors, LLC, on behalf of itself
and as an alleged assignee of all rights, title and interests formerly held by
certain limited partners in CBM I LP,
Settlement Agreement - Page 6
by and through Palm's Counsel, filed its Plea in Intervention. On April 5, 1999,
Equity Resource Fund XI, Equity Resource Fund XIV, Equity Resource Fund XV,
Equity Resource Fund XVII, Equity Resource Fund XX, Equity Resource Fund XXI,
Equity Resource Bay Fund, Equity Resource Bridge Fund and Equity Resource
Pilgrim Fund, on behalf of themselves and as alleged assignees of all rights,
titles and interests formally held by limited partners in CBM I LP, Palm's
Counsel, filed its Plea in Intervention. On April 5, 1999, Equity Resourse Fund
XI, Equity Resource Fund XIV, Equity Resource Fund XV, Equity Resource Fund
XVII, Equity Resource Fund XX, Equity Resource Fund XXI, Equity Resource Bay
Fund, Equity Resource Bridge Fund and Equity Resource Pilgrim Fund, on behalf of
themselves and as alleged assignees of all rights, titles and interests formally
held by limited partners in CMB I LP, by and through Equity's Counsel, filed its
Plea in Intervention. Thereafter, Intervenors Walker and Weiss moved for
certification of a class of certain limited partners of CBM I LP, which was
denied by the Court.
On August 17, 1999, CBM One LLC, the General Partner of CBM I LP,
appointed the SLC to investigate, review and analyze the facts and circumstances
surrounding the alleged derivative claims asserted on behalf of CBM I LP in the
Haas Litigation.
The Haas Litigation involves the following limited partnerships: CBM I
LP, Marriott Residence Inn Limited Partnership ("Residence Inn I LP"), Marriott
Residence Inn II Limited Partnership ("Residence Inn II LP"), Fairfield Inn by
Marriott Limited Partnership ("Fairfield Inn LP"), Desert Springs Marriott
Limited Partnership ("Desert Springs LP") and Atlanta Marriott Marquis Limited
Partnership and Atlanta Marriott Marquis II Limited Partnership (collectively
"Atlanta Marquis LP"), which are collectively referred to as the Haas Litigation
limited partnerships. The Complaint and Pleas in Intervention in the Haas
Litigation allege, among other things, that the Defendants, or some of them: (1)
breached and knowingly participated in breaches of fiduciary duties to various
limited partners and partnerships in the Haas Litigation limited partnerships;
(2) defrauded and conspired to defraud various limited partners and partnerships
in the Haas Litigation limited partnerships; (3) conspired against various
limited partners and partnerships in the Haas Litigation limited partnerships;
(4) violated
Settlement Agreement - Page 7
the TEXAS FREE ENTERPRISE & ANTITRUST ACT OF 1983; (5) breached certain
contracts; and (6) tortiously interfered with certain contracts. Defendants
denied all allegations contained in the Haas Litigation, and have raised
numerous defenses thereto, including, without limitation, the statutes of
limitations.
II. PRETRIAL PROCEEDINGS AND DISCOVERY IN THE MILKES AND HAAS LITIGATIONS
---------------------------------------------------------------------
Extensive discovery and investigation have been conducted in the Milkes
Litigation and, to a lesser degree, the Haas Litigation, including, inter alia:
(i) inspecting hundreds of thousands of pages of documents produced by the
Defendants and non-parties; (ii) deposing numerous present and former employees
of the Defendants; (iii) deposing Plaintiffs; (iv) deposing non-party witnesses;
(v) employing and consulting with experts, including reviewing and producing
expert reports and attending and taking expert depositions; (vi) reviewing
public and on-line filings; and (vii) researching applicable law with respect to
the claims asserted in the Milkes and Haas Litigations. Discovery in the Milkes
Litigation included documents and deposition testimony relevant to claims in the
Haas Litigation. Settlement discussions, individually, with a mediator and with
the SLC, have been intense and protracted.
III. THE BENEFITS OF SETTLEMENT
--------------------------
Plaintiffs' Counsel believe that the claims asserted in the Milkes and
Haas Litigations have merit. They all recognize and acknowledge, however, the
risks and uncertainties associated with the continued prosecution of this
time-consuming litigation, and therefore, believe, that in consideration of all
the circumstances, the proposed Settlement set forth in this Settlement
Agreement confers substantial benefits upon the Plaintiffs and that the
Settlement is fair, adequate, reasonable and in the best interest of the
Plaintiffs, the Palm Intervenors and the Equity
Settlement Agreement - Page 8
Intervenors. The SLC and the SLC's Counsel also believe that, with respect to
CBM I LP subject to Paragraph 9.3 below, and CBM II LP, the Settlement is fair,
adequate and reasonable and it is in the best interests of the Settling Parties
for the SLC to resolve the derivative claims relating to CBM I LP and CBM II LP.
IV. DEFENDANTS' DENIALS OF WRONGDOING AND LIABILITY
-----------------------------------------------
The Defendants have denied and continue to deny each and all of the
claims and contentions of wrongdoing or liability against them arising out of
the conduct, statements, acts or omissions alleged, or that could have been
alleged, in the Milkes and Haas Litigations. The Defendants also have denied and
continue to deny, inter alia, that: (1) any Defendant has breached any contracts
or fiduciary duties; (2) any fraud, deceit or misrepresentations occurred in
connection with the formation, operation or management of any hotel or hotel
limited partnership connected with any of these Defendants; and (3) anyone was
harmed by any conduct alleged in the Milkes and Haas Litigations.
Nonetheless, although each deny wrongdoing of any kind whatsoever and
without admitting liability, the Defendants have concluded that the further
conduct of the Milkes and Haas Litigations would be protracted and expensive,
and that it is desirable that the Milkes and Haas Litigations be fully and
finally settled in the manner and upon the terms and conditions set forth in
this Settlement Agreement in order to limit the burden, expense, inconvenience
and distraction caused by the Milkes and Haas Litigations and to repurchase the
CBM I LP Units and CBM II LP Units. The Defendants also have taken into account
the uncertainties and risks inherent in complex litigation.
Settlement Agreement - Page 9
V. THE TERMS OF THE SETTLEMENT AGREEMENT AND THE AGREEMENT OF SETTLEMENT
---------------------------------------------------------------------
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among the
Plaintiffs, the Palm Intervenors, the Equity Intervenors, the SLC and the
Defendants, by and through their counsel of record in the Milkes and Haas
Litigations, that, subject to the approval of the Court, the Milkes and Haas
Litigations and the Released Claims shall be finally and fully compromised and
settled, and the Milkes and Haas Litigations shall be dismissed on the merits
and with prejudice as to the Defendants, upon and subject to the terms and
conditions of this Settlement Agreement, as follows:
1. Definitions
-----------
As used in this Settlement Agreement the following terms have the
meanings specified below:
1.1 "Atlanta Marquis LP" means the Atlanta Marriott Marquis Limited
Partnership and Atlanta Marriott Marquis II Limited Partnership.
1.2 "Atlanta Marquis LP's Counsel" means Lawrence P. Kolker and the law
firm of Wolf, Haldenstein, Adler, Freeman & Herz, LLP, and Martin D. Chitwood
and the law firm of Chitwood and Harley.
1.3 "Atlanta Marquis LP Notice" means the Notice of Proposed Settlement
of Class Action and Settlement Hearing to be given to the Atlanta Marquis LP
Class which will be certified as part of the Atlanta Marquis LP Settlement, and
to the Palm Intervenors and the Equity Intervenors, if any, who formerly owned
units in Atlanta Marquis LP.
1.4 "Atlanta Marquis LP Plaintiffs" means all persons named as parties
in the Haas Litigation and who formerly owned units in the Atlanta Marquis LP.
1.5 "Atlanta Marquis LP Proof of Claim" means the Atlanta Marquis LP
Proof of Claim and Release.
Settlement Agreement - Page 10
1.6 "Atlanta Marquis LP Settlement" means the settlement of the Sturm
Litigation.
1.7 "Atlanta Marquis LP Settlement Amount" means the aggregate of $4.25
million or $8,018.86 for each of the former 530 Atlanta Marquis LP Units
that does not opt-out of the Atlanta Marquis Settlement and executes the Atlanta
Marquis LP Proof of Claim, reduced, however, by $8,018.86 for each Atlanta
Marquis LP Unit below 530 which fails to settle as provided herein.
1.8 "Atlanta Marquis LP Unit" means a unit of limited partnership
interest in Atlanta Marquis LP.
1.9 "CBM I LP" means the Courtyard by Marriott Limited Partnership.
1.10 "CBM I LP Consent Form" means the form contained in the CBM I LP
Purchase Offer/Consent Solicitation Statement to be completed and returned to
the Claims Administrator to vote on the Proposed CBM I LP Partnership Agreement
Amendments and CBM I LP Merger.
1.11 "CBM I LP Purchase Offer/Consent Solicitation Statement" means the
Purchase/Offer Consent Solicitation Statement which may be set forth in one or
more documents, to be prepared by the Joint Venture and CBM I LP for inclusion
in the CBM I LP Notice and, following Court approval of the CBM I LP Notice,
distributed to the limited partners of CBM I LP seeking (i) their written
consent to the CBM I LP Merger and the Proposed CBM I LP Partnership Agreement
Amendments; and (ii) their assignment, transfer and conveyance to the Joint
venture or one or more of its designees of all right, title and interest in all
|
End of Preview |
Home Intelligence Services Subscriptions News About Us