Investment Research Associates - Page 461




                                       - 51 -                                         
               Since Ballard had negotiated the Houston Hyatt Hotel's                 
          management contract, Knab (Ballard and Lisle's superior at                  
          Prudential) directed Ballard to review and evaluate the terms of            
          the proposed management contracts to be considered for the San              
          Francisco Embarcadero Hotel.                                                
               Subsequently, representatives of the Embarcadero joint                 
          venture participants met with Webb and Pritzker to obtain bids on           
          the Embarcadero Hotel's management contract.  Ballard and Lisle,            
          as well as other Prudential employees, represented Prudential at            
          the meeting.  For reasons not fully shown in the record,                    
          representatives of Intercontinental Co. were not present at the             
          meeting, and Webb refused to submit a bid during the meeting                
          because he thought he had been promised the contract.  Pritzker             
          offered to have Hyatt Corp. enter into a management contract for            
          the Embarcadero Hotel substantially similar to the Houston Hyatt            
          Hotel's management contract.  At the meeting Hyatt Corp.                    
          submitted the only bid, and the management contract was awarded             
          to Hyatt Corp.                                                              
               Shortly after being awarded the contract, Hyatt Corp.                  
          entered into an agreement with KWJ Corp., an S corporation solely           
          owned by Weaver.  Under the written agreement dated February 25,            
          1971, Hyatt Corp. agreed to pay KWJ Corp. a commission generally            
          equal to 10 percent of Hyatt Corp.'s fees under the Embarcadero             
          Hotel management contract.  The agreement acknowledged that "KWJ"           






Page:  Previous  41  42  43  44  45  46  47  48  49  50  51  52  53  54  55  56  57  58  59  60  Next

Last modified: May 25, 2011