A state District Court judge has confirmed an arbitration award of close to $2 million that Ashby Hospitality LLC, ousted as manager of the downtown Hilton, won against the hotel’s owner.
Ashby’s lead attorney, Stephen Babcock, said 19th Judicial District Court Judge Wilson Fields’ ruling shows that Ashby did everything required under the agreement with the Baton Rouge Area Foundation’s Commercial Properties Realty Trust.
“In the end, this litigation was a lot like a poker game. The loser is making bad decisions and doesn’t know when to quit, and the winner just wants his money,” Babcock said in a news release.
The dispute arose when the hotel owner demanded that Ashby reimburse the salaries of the hotel’s accountants, Babcock said.
Commercial Properties had paid the accountants for more than two years before demanding that Ashby take on that expense.
Insisting that Ashby pay the accountants was simply an attempt to force Ashby to reduce its management fee — 4 percent of gross revenue — at a time when the lagging economy affected the hotel’s bottom line, Babcock said.
The dispute pitted Camm Morton, 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 Commercial Properties at the end of 2007 to start Ashby Hospitality and begin managing the hotel.
Ashby’s dispute with the Hilton went to arbitration, where a three-member panel ruled that Commercial Properties wrongfully terminated Ashby’s management agreement.
The panel ordered Commercial Properties to immediately pay the management fees that had been withheld for more than a year, with interest.
The hotel refused to pay, saying the award could not be enforced, according to the lawsuit filed by Ashby.
Babcock described Commercial Properties’ use of the legal system as “unfortunate” and one likely to backfire.
Attorneys for Commercial Properties could not be reached for comment Wednesday afternoon.
Babcock said he expects Commercial Properties will file a “baseless appeal” of the district court ruling in an effort to delay the inevitable.
Those sorts of appeals are common when one party gets badly beaten and a large amount of money is involved, he said.