'Butch' files multi-billion Whitehouse suit
November 11, 2005
TWO of Gordon "Butch" Stewart's firms have filed a multi-billion dollar lawsuit against three Jamaican government-controlled companies, claiming international damage to Stewart's Sandals hotel brand by their failure to deliver a completed and properly-functioning property when the Sandals Whitehouse hotel opened in February.
Not only was Sandals, which manages the hotel, forced to cut rates and/or refund hundreds of guests the cost of their holidays, but Stewart's holding company, Gorstew, argued in court documents filed on Wednesday that the situation severely eroded confidence in the Sandals brand.
Essentially, Sandals' argument is that the terms under which it leased the property were breached because of the negligence of the other parties.
The special damages that Sandals is seeking for these losses have been placed at US$29 million, but the compensation for the alleged damage to the brand was not specified. However, sources close to the case say that it was not unlikely that a figure of US$150 million will be raised when the case comes to the court.
Stewart is also asking the court to rule that his firm should not be called on the contribute to the estimated US$41 million cost overrun on the 400-room hotel, in which it is one-third owner because it made no material design change to the property that would have contributed significantly to the increased cost.
The government's Urban Development Corporation (UDC), the National Investment Bank of Jamaica (NIBJ) and Ackendown Newtown Development Company, which developed the property, are the respondents to the suit. The UDC and the NIBJ, both government agencies, own two-thirds of Ackendown, while Gorstew owns the other third.
Author: Observer Reporter
Source: Jamaica Observer
