Tag Archives: Morgans Hotel Group Co

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OTK Associates Obtains Delay of Morgans Hotel Group's Rights Offering

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By Business Wirevia The Motley Fool

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OTK Associates Obtains Delay of Morgans Hotel Group’s Rights Offering

NEW YORK–(BUSINESS WIRE)– OTK Associates LLC, the largest stockholder of Morgans Hotel Group Co. (NAS: MHGC) with 13.9% of the outstanding common stock of the company, today commented on the postponement of Morgans’ recently announced rights offering and recapitalization plan pending a hearing for a preliminary injunction in Delaware Chancery Court. The hearing is expected to be scheduled before May 15, 2013.

OTK is pleased that the Morgans Hotel Group agreed to delay the rights offering, as OTK had requested in its motion for a temporary restraining order. All shareholders should be deeply troubled by the current board of directors’ continued waste of corporate assets to advocate for a coercive and dilutive transaction that OTK believes is invalid. Further, the use of company funds to change sharehholder voting rules and diminish voting rights calls into question this board’s fiduciary duties and responsibilities.

OTK looks forward to presenting to the Delaware Chancery Court its case that the company’s recapitalization plan is invalid under Delaware law and requesting that the court invalidate the board’s decision to retroactively postpone the 2013 annual meeting and reset the corresponding record date.

IMPORTANT INFORMATION

STOCKHOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO SOLICITATION OF PROXIES BY OTK ASSOCIATES, LLC AND ITS AFFILIATES FROM THE STOCKHOLDERS OF MORGANS HOTEL GROUP CO. FOR USE AT THE 2013 ANNUAL MEETING OF MORGANS HOTEL GROUP CO. WHEN THEY ARE AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. WHEN COMPLETED, SUCH MATERIALS WILL, ALONG WITH OTHER RELEVANT DOCUMENTS, BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION’S WEBSITE AT HTTP://WWW.SEC.GOV OR BY CONTACTING THE PARTICIPANTS’ PROXY SOLICITOR, OKAPI PARTNERS, TOLL FREE AT (877) 869-0171, OR BY EMAIL TO INFO@OKAPIPARTNERS.COM.

INFORMATION RELATING TO THE POTENTIAL PARTICIPANTS IN A POTENTIAL PROXY SOLICITATION IS CONTAINED IN EXHIBIT 1 TO THE SCHEDULE 14A FILED PURSUANT TO RULE 14A-12 FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY OTK ASSOCIATES, LLC ON APRIL 8, 2013, AS IT MAY BE AMENDED FROM TIME TO TIME. THE SCHEDULE 14A AND ANY AMENDMENTS ARE AVAILABLE AT NO CHARGE ON THE SECURITIES AND EXCHANGE COMMISSION’S WEBSITE AT HTTP://WWW.SEC.GOV.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

OTK Associates Files a Motion to Join Derivative Lawsuit Against Morgans Hotel Group

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By Business Wirevia The Motley Fool

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OTK Associates Files a Motion to Join Derivative Lawsuit Against Morgans Hotel Group

Alleges that Company’s Recapitalization Plan is Invalid Under Delaware Law and Board Actions Disenfranchise Stockholders and Entrench Management

NEW YORK–(BUSINESS WIRE)– OTK Associates LLC, the largest stockholder of Morgans Hotel Group Co. (NAS: MHGC) with 13.9% of the outstanding common stock of the company, today disclosed that it has filed a motion to join a derivative lawsuit filed in Delaware Chancery Court to stop a self-serving recapitalization that the company is rushing to consummate in advance of a stockholder meeting initially scheduled for May 15, 2013.

OTK Associates also issued the following letter to MHGC stockholders:

April 5, 2013

Dear Fellow Stockholders,

We are writing to inform you that we have filed a motion to join the recently filed derivative lawsuit against Morgans Hotel Group that seeks to stop a series of transactions with the Yucaipa Companies which the company’s directors are rushing to consummate. The board’s actions are invalid under applicable Delaware law, and will further disenfranchise stockholders while thoroughly entrenching the current board and management.

As the company’s largest stockholder, we are deeply concerned by actions of this nature deliberately undertaken during an ongoing proxy process. The board’s move to effectuate a coercively dilutive recapitalization is an obvious attempt to place a large block of stock in friendly hands prior to the annual meeting in order to preserve the positions of its incumbent directors and avoid review of the transaction by a truly independent board.

Similarly, the board’s retroactive decision to postpone the previously scheduled annual meeting to July 10, 2013 from May 15, 2013, and to reset the meeting’s record date to May 29, 2013 from March 22, 2013, serves only to ensure stockholders will be denied the benefit of reviewing the transaction. Existing stockholders of record will effectively lose their right to cast votes at the May 15th meeting, where we believe the company’s incumbent directors would likely be replaced by OTK‘s proposed nominees. This attempt to both rig an election and defend a self-dealing transaction will further burn the funds of a company already operating at a loss.

To preserve stockholders’ rights and the integrity of the corporate decision-making process we are seeking the following:

Business, Finance, Occupation & Industry

OTK Associates Comments on Morgans Hotel Group's Agreement with The Yucaipa Companies

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By Business Wirevia The Motley Fool

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OTK Associates Comments on Morgans Hotel Group’s Agreement with The Yucaipa Companies

NEW YORK–(BUSINESS WIRE)– OTK Associates LLC, the largest shareholder of Morgans Hotel Group Co. (NAS: MHGC) with 13.9% of the outstanding common stock of the company, today commented on Morgans’ agreements with The Yucaipa Companies.

As the largest shareholder of Morgans, OTK Associates is deeply concerned by the company’s announcement of a material transaction with an insider and major creditor during an ongoing proxy process. OTK Associates questions whether the board’s special committee has appropriately considered, in earnest,alternatives to consummating yet another ill-timed transaction with an interested party,especially given that two of Morgans’ directors have a significant financial interest in the transaction.

Furthermore, the attempt to alter the previously announced shareholder record date for the Annual Meeting of Stockholders is a clear effort to circumvent the proxy process and disenfranchise shareholders of record at a time when a credible slate of alternative board members has been proposed for consideration.

The rights offering would advantage The Yucaipa Companies over all other shareholders who are subject to the company’s prohibitive poison pill threshold and coercively dilute existing shareholders who are unlikely to want to invest in the policies of the existing management and board.

The proposed transaction retroactively and deliberately delays the shareholder vote and, left unchallenged, this postponement allows Yucaipa to amass a significant voting equity position where there was none as of the previously established record date.

In addition to these concerns, the proposed transaction does almost nothing to address the ongoing fundamental issues plaguing the company’s operating performance, misalignment of interests and bloated overhead. Yesterday’s announcement is indicative of the type of insider dealings to which shareholders without proper representation will remain vulnerable barring significant change at the board level. In light of these developments, OTK Associates is evaluating all legal rights and remedies.

IMPORTANT INFORMATION

STOCKHOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO SOLICITATION OF PROXIES BY OTK ASSOCIATES, LLC AND ITS AFFILIATES FROM THE STOCKHOLDERS OF MORGANS HOTEL GROUP CO. FOR USE AT THE 2013 ANNUAL MEETING OF MORGANS HOTEL GROUP CO. WHEN THEY ARE AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. WHEN COMPLETED, SUCH MATERIALS WILL, ALONG WITH OTHER RELEVANT DOCUMENTS, BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION’S WEBSITE AT HTTP://WWW.SEC.GOV OR BY CONTACTING THE …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

OTK Associates to Nominate Directors to Morgans Hotel Board

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By Business Wirevia The Motley Fool

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OTK Associates to Nominate Directors to Morgans Hotel Board

NEW YORK–(BUSINESS WIRE)– OTK Associates LLC, the largest shareholder of Morgans Hotel Group Co. (NAS: MHGC) with 13.9% of the outstanding common stock of the company, today disclosed that it intends to nominate a slate of seven candidates to the company’s board of directors and notified the company of its intent in a letter on March 15, 2013. Morgans’ 2013 Annual Meeting of Shareholders is scheduled to be held on May 15, 2013.

OTK Associates also disclosed a letter to MHGC shareholders outlining why it believes a reconfiguration of the Board is urgently needed. The full text of the letter follows:

March 18, 2013

Dear Fellow Stockholders,

We are writing to inform you that on Friday, March 15, OTK Associates, LLC delivered notice to Morgans Hotel Group of its intent to nominate seven qualified candidates to the company’s board of directors at the upcoming annual meeting of stockholders on May 15, 2013.

As the company’s largest stockholder, with a 13.9% ownership stake or 4,500,000 common shares of Morgans, we are seeking your support to elect directors that have the skills and experience necessary to either grow the business and return the company to profitability or to appropriately evaluate and pursue strategic alternatives in a disinterested fashion. We are nominating a slate of directors that brings significant lodging industry expertise, capital markets experience and superior hotel operating acumen. We strongly believe that a reconfigured board is a prerequisite for improving the company’s financial performance and competitive position, and for harvesting additional value from its existing asset base.

OTK is a partnership between families that have a demonstrated track record of creating value in the real estate and lodging industries. OTK acquired its position in Morgans more than five years ago and has not sold any shares since that time. During this period, OTK has observed as various management teams and board members squandered resources and failed to capitalize on the extraordinary brand value of the company. OTK believes that new leadership is urgently needed to protect the interests of common stockholders and maximize stockholder value going forward, and we believe the majority of Morgans’ common stockholders will agree.


Need for Alignment of Interests:

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Source: FULL ARTICLE at DailyFinance