Suit filed in Hard Rock purchase
Pacific Business News (Honolulu)
A Baltimore-based company involved in the development of two Hard Rock casinos in Florida has sued Hard Rock Café International Inc. and the Seminole Tribe of Florida, claiming the two companies colluded to leave it out of the bidding to purchase the restaurant and hotel chain.
The Cordish Co. and its affiliate, Power Plant Entertainment, have filed a lawsuit in circuit court in Broward County, challenging the planned $965 million purchase of the International Hard Rock brand by the Seminole Tribe through its subsidiary, Seminole Hard Rock Entertainment Inc., announced on Dec. 7.
Officials with Cordish said they filed the lawsuit Dec. 30. The lawsuit says both Hard Rock and the Seminole Tribe "participated in collusion and bid rigging with respect to offers to purchase Hard Rock from" the Rank Group, the London-based company which owns the Hard Rock assets. Cordish officials said they were precluded from bidding for Hard Rock by the company "artificially fixing a value and price ... by eliminating, reducing or interfering with competition."
Cordish was never allowed to receive bid documents from Merrill Lynch, who was representing Rank in the process, according to the lawsuit. Cordish officials were never allowed to access specific documents necessary to complete their due diligence of the Hard Rock chain, and if they had, company officials said they would've outbid the Seminole Tribe for the assets.
Cordish tried to obtain bid materials twice between Sept. 1 and Sept. 7, according to the lawsuit, but were told both times by Merrill Lynch not to provide documents to the company and that Rank would not consider a bid from Cordish.
The lawsuit charges that Rank and the Seminole Tribe violated Florida's Deceptive and Unfair Trade Practices Act, and is seeking unspecified financial damages.
Shareholders for the publicly held Rank Group are expected to vote on the Hard Rock sale to the Seminole Tribe Jan. 8. Hard Rock operates restaurants in Waikiki, Lahaina and Kona.
Cordish's Power Plant Entertainment subsidiary developed the two Seminole Hard Rock hotels and casinos in Tampa and Hollywood, becoming the most profitable gaming properties in the country, according to company officials.
The Seminole Tribe, which is currently negotiating with state officials over adding a Class III casino-style gambling operation in Broward County, opened its first high-stakes bingo hall and casino in 1979.
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