Gordian was engaged by a member of the Board of Directors as expert witness in connection with the defense of claims brought by a minority shareholder, OTK Associates, against the former Board of Directors.
Case Study
Morgans Hotel Group
CLIENT: Independent members of the Board of Directors
Industries
Real Estate, Hospitality & GamingBusiness Profiles
Situation
In March 2013, Morgans Hotel Group entered into a transaction with its largest shareholder, Yucaipa, that was opposed by a minority shareholder, OTK Associates, LLC (“OTK”). OTK alleged the transaction was designed to give Yucaipa outright ownership of the Company’s crown jewel property and enough stock to exercise control at the shareholder level at a discount.
Engagement
Gordian was engaged as expert witness in connection with the defense of claims brought by OTK, against the former Board of Directors. Gordian’s work involved detailed analysis with respect to Morgans Hotel Group’s business condition, solvency and a specific contemplated transaction between the Company and Yucaipa. Gordian Group performed extensive quantitative and qualitative analyses to evaluate the individual components of both sides of the transaction. Gordian Group prepared an expert report but did not have to testify in court.
Outcome
The case settled.