Two heavyweights — hedge-fund titan John Paulson and Blackstone’s Steve Schwarzman — are butting heads in the CNL Hotels & Resorts bankruptcy case over the termination of some lucrative Hilton Hotel management contracts.
Paulson and Winthrop Realty Trust, which control the equity and put CNL into bankruptcy, are looking to cancel Blackstone’s Hilton Hotel management contracts that cover the Arizona Biltmore, the Grand Wailea in Maui, and La Quinta Resort & Club in Palm Springs, Calif., and others.
Michael Ashner, Winthrop CEO, confirmed that the Arizona Biltmore and the Claremont in Berkeley, Calif. “are being offered to a select group of buyers free and clear of any management agreements.”
Those sales are setting the stage for a battle as Hilton is valuing the contracts at $330 million while CNL values them at a mere $50 million.
Last week, a judge gave Paulson until June 24 to file a reorganization plan. A Blackstone spokesman declined comment.
