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other consulting and fee participation agreements GHM and MHM had
with Essex Partnership.
As the total fees that MHM paid to Essex generally equaled
the total fees that GHM (Connolly’s hotel management company)
paid to Essex, the total fees MHM paid to the partnership roughly
approximated MHM’s distributive share of partnership income as a
47.5-percent partner in Essex Partnership. However, as indicated
previously, MHM was not paid directly for the substantial
services its employees rendered to GHM. Rather, as a partner in
Essex Partnership, MHM received 47.5 percent of the partnership’s
income. Although IRA and THC, as partners, also received a
combined 47.5 percent of the income of Essex, IRA and THC, in
contrast to MHM, provided no similar substantial services to GHM.
Eulich and MHM’s top management essentially viewed
involvement in Essex Partnership as a marketing and sales device,
whereby MHM eventually might obtain more management contracts for
large hotels. By having MHM participate in Essex Partnership,
Eulich hoped to have Kanter help MHM obtain additional hotel
management contracts.
Eulich was not familiar with IRA or THC and testified in
pertinent part:
Kanter was the person whose influence and contacts that
we wanted at MHM because of his--again, his involvement
as one of the founders of Hyatt International, his
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