Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nyse  >  Marriott International Inc    

MARRIOTT INTERNATIONAL INC
Mes dernières consult.
Most popular
  Report  
SummaryNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsofficial PublicationsSector newsTweets
OFFRE ETE Zonebourse : Jusqu'à 6 mois offerts sur tous les portefeuilles

U.S. Wants Resort Sale Postponed to Clear Up $331 Million Tax Issue

share with twitter share with LinkedIn share with facebook
share via e-mail
0
01/11/2013 | 12:37am CEST

(Adds that resort group declined to comment in eighth paragraph.)

 
   By Joseph Checkler 
 

The U.S. has a $331 million problem with the sale of a group of luxury resorts to the government of Singapore.

Preet Bharara, U.S. Attorney for the Southern District of New York, said in court papers that MSR Resort Golf Course LLC's plan to sell its resorts to the real-estate arm of Singapore's sovereign wealth fund creates $331 million in tax liabilities that should be owed to the Internal Revenue Service but can't be collected.

Mr. Bharara added in the Wednesday bankruptcy-court filing that the resort group didn't notify the IRS about the tax issue before a key "disclosure statement" hearing, even though the resort group told a judge otherwise.

"Debtors' counsel reached out to the Department of Justice on or around the day after the Disclosure Statement hearing," Mr. Bharara said in his filing. The U.S. is the second entity to go after the tax issue.

Mr. Bharara's argument is that MSR's $1.5 billion sale of four resorts to the Singapore fund, GIC RE, creates $331 million in taxable gains that should be automatically owed to the IRS. The problem, though, is that the documentation surrounding the purchase agreement contains wording that would stop the IRS from collecting on the taxes.

"Seeking such an injunction purporting to limit the IRS's ability to pursue any liabilities stemming from the Purchase Agreement is particularly disingenuous given that, at the same time, Debtors concede that 'the law is unclear'" when multiple taxpayers are involved, Mr. Bharara said. The sale document also concedes the IRS could win if it goes after the money. Mr. Bharara argues that a bankruptcy judge does not have the authority to decide on tax liabilities for any party other than the one in bankruptcy.

Mr. Bharara's filing comes on the heels of a similar objection by investment firm Five Mile Capital Partners LLC, a key adversary of MSR throughout the bankruptcy case. Five Mile, a junior lender that stands to recover none of its money in the case, said the liability could "infect" the entire bankruptcy.

A spokesman for the resort group, controlled by hedge-fund manager John Paulson, declined to comment.

In his filing, Mr. Bharara asked Judge Sean H. Lane to postpone a Jan. 15 hearing at which he will consider signing off on the resorts' bankruptcy plan. The U.S. attorney adds that MSR's attorneys declined a similar request of adjourning that hearing.

In December, no one bid against Singapore at a scheduled auction of the resort group's properties: Maui's Grand Wailea Resort Hotel & Spa, the La Quinta Resort & Club in La Quinta, Calif.; the Arizona Biltmore in Phoenix; and the Claremont in Berkeley, Calif.

The deal also includes the Great White Course, a Greg Norman-designed golf course adjacent to the Doral Golf Resort & Spa in Miami. A company controlled by Donald Trump in June bought the Doral from Paulson for $150 million.

The $1.5 billion deal includes a $1.1 billion cash payment for the properties and $360 million in debt forgiveness. The resort owner will pay 100% of the claims of Hilton Worldwide and Marriott International Inc. (>> Marriott International, Inc.), which have managed several of the resorts. The owners of some of the resorts' so-called "mezzanine" debt will get 100% of their money back, while another tier of those lenders will get between 8% and 68%. Five Mile stands to get nothing for its junior mezzanine loan.

The resorts' trip through bankruptcy began in February 2011, when Paulson teamed with Michael Ashner's Winthrop Realty Trust (>> Winthrop Realty Trust) to seize the properties through a foreclosure proceeding. Days later, the group put the resorts into Chapter 11 to avoid paying more than $1.5 billion in senior debt.

Since the filing, the company has made several structural changes, reshaping contracts with property managers Hilton and Marriott, before preparing its resorts for the sale so it can repay creditors.

(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com)

Write to Joseph Checkler at [email protected]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

Stocks mentioned in the article : Marriott International, Inc., Winthrop Realty Trust
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on MARRIOTT INTERNATIONAL INC
03:43pMARRIOTT INTERNATIONAL : Le Meridien Hotels & Resorts Is On Summer Holiday
PU
03:40pMARRIOTT INTERNATIONAL : Outlines Overhaul of Sheraton Brand
AQ
01:40pMARRIOTT INTERNATIONAL : to open 121-room Jaffa hotel in July
AQ
06/15BACK DOWN UNDER : W Hotels Returns to Sydney in 2020; W Sydney Set to Mark the T..
AQ
06/15MARRIOTT INTERNATIONAL : Hotel Capital Acquires The Tremont Chicago Hotel at Mag..
AQ
06/14MARRIOTT INTERNATIONAL : Westin Hotels & Resorts Partners With Charity Miles Mot..
AQ
06/14MARRIOTT INTERNATIONAL : to open 121-room Jaffa hotel in July
AQ
06/14INSIDER TRADING ACTIVITY MARRIOTT IN : MAR) – Insider Sold 3,206 shares of..
AQ
06/14MARRIOTT INTERNATIONAL : Virtua Partners Breaks Ground on Fairfield Inn & Suites
AQ
06/14ALOFT HOTELS, UNIVERSAL MUSIC GROUP : Aloft Star' Tour
AQ
More news
Financials ($)
Sales 2018 22 665 M
EBIT 2018 2 817 M
Net income 2018 1 909 M
Debt 2018 8 613 M
Yield 2018 1,11%
P/E ratio 2018 26,06
P/E ratio 2019 21,90
EV / Sales 2018 2,54x
EV / Sales 2019 2,42x
Capitalization 49 056 M
Income Statement Evolution
Consensus
 
Mean consensus OUTPERFORM
Number of Analysts 25
Average target price 150 $
Spread / Average Target 7,7%
EPS Revisions
Managers
NameTitle
Arne M. Sorenson President, Chief Executive Officer & Director
John Willard Marriott Executive Chairman
Raymond Bennett Chief Global Officer- Global Operations
Kathleen Kelly Oberg Chief Financial Officer & Executive Vice President
Bruce Hoffmeister Global Chief Information Officer
Sector and Competitors
1st jan.Capitalization (M$)
MARRIOTT INTERNATIONAL INC49 056
MARRIOTT INTERNATIONAL2.28%49 056
HILTON WORLDWIDE HOLDINGS INC4.98%25 187
ACCOR3.02%14 852
HUAZHU GROUP LTD (ADR)35.76%14 287
INTERCONTINENTAL HOTELS GROUP PLC4.28%12 443