-83-
KWJ Corp.” for $150,000 and Mr. Weaver’s continuing right to
receive an amount equal to 30 percent of the payments KWJ Corp.
received from Hyatt Corp. on the Embarcadero Hotel’s management
contract.45
Kanter testified that Weaver agreed in the mid-1970s to sell
KWJ Corp. to IRA for $150,000 because he needed the money.
Kanter, Transcr. at 3652-3653. There is no indication in the
record that the option Weaver granted to Kanter had any
independent value--Weaver simply granted IRA an open-ended option
to purchase KWJ Corp. for $150,000. Exh. 9103. As discussed
below, IRA’s purchase of KWJ Corp. was delayed until 1979 after
Hyatt Corp. had become a privately held corporation.46
45 Hyatt Corp.’s fees under the Embarcadero Hotel’s
management contract were based, in substantial part, on the
hotel’s operational profits. The Embarcadero Hotel opened for
business in 1973. During the first few years of the hotel’s
operation, the “commissions” KWJ Corp. received from Hyatt Corp.
were less than Mr. Weaver had expected. According to Kanter, at
the time he and Mr. Weaver negotiated KWJ Corp.’s sale to IRA,
Mr. Weaver needed money. Beginning in about the late 1970s the
Embarcadero Hotel’s profits increased significantly. Part of
this increased profitability was attributable to improvements
that Hyatt Corp. helped to finance by lending about $1 million to
the Embarcadero Hotel’s owners for certain improvements to the
hotel.
46 Although Hyatt Corp. often did pay finder’s fees or
commissions to individuals helping it to obtain valuable business
contracts, Hyatt Corp. also did not want to publicize the
specific payment amounts. It believed that such public
disclosure would cause other individuals to demand similar
compensation for future business opportunities to Hyatt Corp.
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