Burkle Sues Hotel Group Shareholders

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Billionaire Ron Burkle has filed suit against the largest shareholder of Morgan Hotel Group Co., operator of the Mondrian in West Hollywood.

Burkle, whose L.A. investment firm Yucaipa Cos. is a large Morgan shareholder, accused investment firm OTK Associates of misleading shareholders during a proxy battle earlier this year that ended with Burkle’s ouster from the board last month. Burkle claims OTK used proxy solicitations to misinform voters. All seven OTK candidates were appointed as directors. The suit was reported by Bloomberg News.

New York-based Morgan operates 13 hotels, including the landmark Mondrian on the Sunset Strip. According to reports, Burkle had been planning to look into a sale of the company.

Chris Agnew, an analyst who follows Morgan Hotel Group at MKM Partners in Stamford, Conn., told the Business Journal he doesn’t see a good chance of Burkle overturning the vote.

“It’s a relatively weak case,” Agnew said. “I’m not sure there’s a high likelihood of a favorable outcome.”

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