-148-
percent from the 30 percent required under the original
agreement), 57 percent of its management fees from the Allentown
Hilton (an increase of 14 percent from the 43 percent required
under the original agreement), and 57 percent of its management
fees from the newly acquired Twin Sixties Hotel management
contract. Exh. 350, exh. A.
From 1982 through 1986, the specified percentage of fees
Essex Partnership received under the various consulting and fee
participation agreements it had with GHM and MHM varied and, at
times, was adjusted.77 In operating Essex Partnership, the
partners agreed the fees GHM paid Essex Partnership generally
would equal the fees MHM paid to the partnership. The
partnership’s specified percentage of fees under each consulting
and fee participation agreement could easily be adjusted and
modified, as each consulting and fee participation agreement was
subject to cancellation on 30-to-90-days’ notice. As a result,
if a significant change occurred with respect to the compensation
that GHM or MHM received under a particular hotel management
contract, an offsetting change then could be effectuated in the
77 On Jan. 1, 1986, Connolly executed a new Representation
and Marketing Agreement on behalf of GHM which provided that GHM
would pay to Essex Partnership 40 percent of the fees earned on
the Gateway Hilton and Midland Hilton management contracts. Exh.
351. Formby believed this modification was made because
Connolly’s salary was no longer being paid by the Gateway Hilton.
Formby, Transcr. at 1542.
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