
A new board has been elected to lead the future of Morgans Hotel Group, under the pressure from OTK Associates, a major shareholder, who openly criticized the former team and management. The sale to a boutique hotel group that had already been mentioned is again at the center of the power struggle.
The shareholders of Morgans Hotel Group (13 hotels including the famous Delano in Miami, Royalton New York, Mondrian in Los Angeles, New York and London ...) have renewed the Board focusing on proposals for a dissenting shareholder, OTK Associates, which returned several of its candidates, a sign of mistrust of the previous team.Alfred Taubman, head of OTK Associates, which owns 14% of the Morgans Hotel Group, has strongly criticized the recent decisions of the management team, led by Michael Gross, and has demanded a shift in strategy. It was largely agreed to by all shareholders. A decision set the board on fire when management proposed a debt swap and options on securities held by the Yucaipa group of billionaire Ron Burkle in exchange for the transfer of ownership of the Delano Hotel South Beach Miami and Light Group, a catering company of high standing. This transfer was judged unfavorable to future interests of the hotel group by OTK, whose market value has fallen by two thirds in five years.Michael Olshan, founder of the OTK Associates fund, and new member of the board of directors, expressed his satisfaction: "The vote sends a clear and compelling message to Morgans Hotel Group shareholders to show that a significant change is necessary for the company." In Focus, a detailed review of management costs that are considered extravagant and sometimes questioning the agreement with Yucaipa. A new director will take control of the company. He or she will manage the next elections with a total debt of $ 552 million.