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Abu Dhabi, UAESaturday 22 September 2018

Prince Alwaleed's Kingdom and Ashkenazy sue owner of New York Plaza Hotel

Two firm's asked judge to compel Sahara to sell them the property

Prince Alwaleed's Kingdom Holding is suing majority owner of landmark property. Guy Martin/Bloomberg
Prince Alwaleed's Kingdom Holding is suing majority owner of landmark property. Guy Martin/Bloomberg

Ashkenazy Acquisition and Saudi Prince Alwaleed bin Talal’s Kingdom Holding, the investors trying to buy New York’s historic Plaza Hotel, sued the property’s majority owner for allegedly reneging on an agreement that gives the group the right to match another offer.

Sahara US, which owns a 70 per cent stake in the hotel, demanded a second deposit and has been negotiating with other parties, according to a complaint filed in New York state court Friday. Minority investors Ashkenazy and Kingdom earlier this month exercised their right of first refusal on a $600 million bid for the property to instead try to purchase it on their own.

The clash between the investors is another twist in a years-long sales process for the 111-year-old building at the corner of Fifth Avenue and Central Park South. Sahara US is an entity tied to Sahara India Pariwar, which has been attempting to sell its stake amid troubles faced by its chairman, Subrata Roy, who has been ordered to return billions of dollars to investors.

Sandeep Wadhwa, president of Sahara US, said the company disagrees with the allegations and will file a response in court.

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Read more:

Exclusive: New York Plaza buyer plans to bring hotel to UAE

Alwaleed's Kingdom and partners to sell New York Plaza for $600m

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Sahara earlier this month agreed to sell the Plaza to Shahal Khan, founder of Dubai-based family office White City Ventures, and Kamran Hakim, of New York landlord Hakim Organisation. They agreed to pay $600m in a deal that was set to be completed on June 25, and talked up plans to use the hotel to launch a global brand.

Ashkenazy and Kingdom, which each own 12.5 per cent of the Plaza, said in the complaint that Mr Khan and Mr Hakim have been soliciting financing for the purchase with Sahara’s knowledge, which has interfered with their own ability to seek funding to purchase the hotel.

Ashkenazy is willing and able to fund the deal if Kingdom is unable to contribute, according to a person with knowledge of the matter, who asked not to be named because the transaction is private. Some people close to the deal are concerned that Kingdom might not have access to capital after Prince Alwaleed was detained at the Ritz-Carlton in Riyadh for 83 days through January, in what Saudi officials described as an anti-corruption crackdown.

Ashkenazy and Kingdom asked the judge to compel Sahara to sell them the property, as well as to execute an appropriate agreement for the sale on the same terms as the initial deal granting them right of first refusal. They also asked for a court order declaring a second deposit isn’t required.

The chateau-like Plaza is a New York landmark, known as the home of the children’s book character Eloise and the site of famous events such as the signing of the 1985 Plaza Accord that devalued the US dollar. It has a long string of prior owners including President Donald Trump, who was forced to sell it to a group including Prince Alwaleed more than two decades ago as part of a bankruptcy. Much of the hotel portion of the building was later converted to condominiums by another owner.

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