Anglo in talks with management firm over NY hotels
Published 11/03/2010 | 05:00
Nationalised lender Anglo Irish Bank is understood to be in discussions with a hotel management company to advise it on options in relation to two hotels it owns with a group of investors in Manhattan, New York.
The bank is in a legal dispute with some of the investors over the Beekman Tower and Eastgate Tower hotels, both in affluent parts of Manhattan.
However, the Irish Independent understands the bank is considering hiring a firm, believed to be Interstate Hotels & Resorts, to advise it on the properties. The bank refused to comment when asked this week.
"The bank is nationalised and the board and management team are determined to protect the interests of the taxpayer," said the bank in a statement.
The bank also refused to provide any numbers on how the hotels were trading.
The New York Hotel Fund is the vehicle used to invest in the hotels. It was organised by Anglo Irish Private Bank, using money from 50 high-net-worth clients.
The fund is the subject of a legal dispute between the bank and a number of investors, who are seeking a refund on their investment.
The investors are alleging fraud, a charge the bank strenuously rejects. It is understood the bank is in arbitration on the matter in New York.
Anglo said: "As the legal dispute is ongoing, the bank cannot comment, respecting the jurisdiction of the Commercial Court. However, it is important to add that the bank will continue to vigorously defend its position in this matter."
In November, it emerged that a leading businessman had accused Anglo Irish Bank of acting fraudulently when it used money from wealthy Irish investors to buy the two hotels.
Gerry McCaughey, the founder of Century Homes, had accused the lender of engaging in fraudulent or reckless concealment, and of fraudulent misrepresentation or conspiracy. The big business division of the High Court was told that the bank is being sued by 21 "high-net-worth", Irish-based private investors.
Anglo has rejected the claims and has accused certain investors, particularly Mr McCaughey, of engaging in conduct not in the best interest of the fund.
The case is listed for hearing later this year.