Judge orders Waikiki hotel back to Marriott

/ Source: The Associated Press

A judge in New York returned control of a Waikiki hotel to Marriott International on Wednesday, days after the resort's ownership group ordered a change in management and new name.

The Waikiki Edition has been at the center of a recent fight between hotel investment group M Waikiki LLC and Marriott, with the ownership group saying the 353-room property has been mismanaged.

The dispute came to a head early Sunday when M Waikiki LLC took control of the hotel, installing new management and re-naming the facility The Modern Waikiki.

Hours after Marriott announced the judge's order Wednesday, M Waikiki said it filed for Chapter 11 bankruptcy protection and that the company plans to continue operating the hotel as The Modern.

"We respectfully disagree with today's court decision and remain confident that the owner acted within its rights terminating its contract with Marriott," William Brewer III, an attorney for the owner, said in a statement. "In any event, the owner has filed for bankruptcy protection, which will permit it to continue the operation of the hotel under its present management with Modern Management Services."

The action to remove Marriott as manager came months after a lawsuit was filed in May against Marriott and boutique hotelier Ian Schrager, claiming that since the property opened as the first Edition hotel in late 2010, it suffered from poor occupancy, a lack of brand identity and Marriott's unwillingness to control expenses.

Marriott described the takeover as a raid "under cover of night" and fought the takeover in court, saying that the ownership group's action violated a long-term contractual agreement.

"The past few days have been trying, frustrating and confusing for our guests and employees," Arne Sorenson, Marriott International's president and chief operating officer, said in a statement. "We're glad the judge returned the Waikiki EDITION to our hands."

Sorenson said Marriott was in the process of resuming operations after the judge's order.