Estate of Burton W. Kanter, Deceased, Joshua S. Kanter, Executor, and Naomi R. Kanter, et al. - Page 64

                                                -149-                                                   
            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                                    





Page:  Previous  139  140  141  142  143  144  145  146  147  148  149  150  151  152  153  154  155  156  157  158  Next

Last modified: May 25, 2011