A Chicago investment company is suing over claims it was cut out of a transaction it arranged for the sale of a Kansas company's six-hotel portfolio.
Alternative Investment Resources filed a lawsuit Oct. 20 in Cook County Circuit Court against Capital Management Inc., alleging breach of contract and misappropriation of trade secrets.
According to the complaint, plaintiff AIR, a financial services firm with an international network of investors and advisers, was engaged by Capital Management to find prospective buyers for its portfolio of six hotels across the U.S.
AIR claims it agreed under the condition that its proprietary information be used solely for evaluating potential buyers, it was not circumvented in the transaction and was paid a small percentage of the sales price.
The lawsuit states the defendant accordingly signed a non-disclosure and non-circumvention agreement Sept. 10, 2012. AIR contends it identified a potential buyer, BC Lynd Hospitality, but following extensive discussions, no agreement was reached by the end of 2012, and all parties agreed to renew discussions after the holiday season.
In 2013, AIR claims Capital Management stopped returning its calls, and learned that BC Lynd Hospitality had acquired the defendant's hotel portfolio through an entity created for the transaction. AIR asserts this constituted a breach of contract, effectively cutting it out of the transaction believed to have included a purchase price of more than $59 million.
According the lawsuit, when AIR contacted Capital Management about payment in November 2013, the defendant refused to compensate AIR, and its invoice went unpaid.
AIR is seeking more than $450,000 in damages, plus interest, attorney fees and costs. It is represented by attorneys Timothy A. Hudson and Caesar A. Tabet of Tabet DiVito Rothstein in Chicago.
Cook County Circuit Court case number: 2014L010881.
This is a report on a civil lawsuit filed in Cook County Circuit Court. The details in this report come from an original complaint filed by a plaintiff. Please note, a complaint represents an accusation by a private individual, not the government. It is not an indication of guilt and it represents only one side of the story.