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contract with Cox and to award the management contract to
Connolly.
Ostroff told Connolly that Prudential wanted him to manage
the Gateway Hotel. Ostroff informed Connolly that he would have
to establish a management company of his own and that all hotel
employees would have to be employees of Connolly's hotel
management company.16 Establishing such a hotel management
company, however, presented a problem for Connolly. The
management company would be required, among other things, to
employ a financial manager and an accounting staff to prepare and
issue the financial reports required by Prudential on the Gateway
Hotel's operations. The full-time employment of such personnel
to perform these and other required services could well be
uneconomical, since Connolly's company would be managing only one
or two hotels.
Ballard introduced Connolly to Eulich. Eulich also knew
Kanter from certain prior business ventures in which Kanter had
helped raise capital. Kanter and Eulich were aware Connolly
would need assistance for his hotel management company. Eulich
also wanted Eulich-Management's business to include the
management of a number of large hotels. He believed that
16
Prudential did not want to have its employees involved in
operating the hotel and did not want any of the hotel's employees
to be Prudential employees.
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