Ashby Hospitality LLC has asked the state District Court to enforce an arbitration award against the downtown Hilton for management fees that could amount to millions of dollars.
The dispute pits Camm Morton, the former chief executive officer of the Baton Rouge Area Foundation’s Commercial Properties Realty Trust, against his former employer and employees.
As head of commercial properties, Morton was instrumental in the renovation and opening of the downtown Hilton.
He retired from the Commercial Properties at the end of 2007 to start Ashby Hospitality and begin managing the hotel.
Commercial Properties remains the building’s owner.
According to court records, Ashby was paid 4 percent of the Hilton’s gross revenue to manage the hotel.
The total amount in contention, including interest and attorneys’ fees, could approach $2 million.
For example, in 2008, when the Hilton hired Ashby, that 4 percent amounted to more than $634,000, according to court documents.
According to the suit filed by Ashby, the hotel was losing money in 2010 because of a weak business travel market and increased mortgage payments, and “manufactured a dispute” with Ashby in an effort to lower the management fee.
“Ashby called the bluff,” the lawsuit said.
In June 2010, the hotel ousted Ashby as its manager.
The dispute went to arbitration, and a three-member panel ruled in Ashby’s favor three weeks ago.
The arbitrators ordered the Hilton to pay all the management fees owed to Ashby, with interest, and to pay Ashby the management fee for each month through the end of the year.
According to the lawsuit, the Hilton says the arbitration award cannot be enforced, and the hotel has suggested it does not intend to abide by the panel’s ruling.
The Hilton also says it wants Ashby to have nothing to do with the hotel’s operations.
In an email to Morton dated June 5, Chris Gavrelis, chief operating officer of Commercial Properties, says: “Please do not contact any of our hotel employees and please do not come to the hotel. You have no right to be there.”
If Morton has any questions, he should have his attorney contact the Hilton’s attorneys, Gavrelis says.
Attorneys for Ashby and the Hilton could not be reached for comment Monday.