-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.Page: Previous 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 Next
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