1/4/2007 Seminole/Hard Rock

from the South Florida Sun-Sentinel (1/3/2006)


Developer sues Seminoles, accuses tribe of rigging sale of Hard Rock empire
By John Holland
South Florida Sun-Sentinel
January 3, 2007

"The Seminole Tribe cut a secret deal guaranteeing it would win control of the Hard Rock Cafe empire at the expense of shareholders and potential bidders, according to a lawsuit filed by a rival suitor.
The Cordish Co., which built the tribe's lucrative casinos in Hollywood and Tampa, accuses the Seminoles of orchestrating a bid-rigging scheme in the months before buying the Hard Rock trademark, memorabilia and most of its properties for $965 million. Baltimore-based Cordish claims it would have paid substantially more but was blocked from bidding because the tribe conspired with some Hard Rock executives to discourage competition and keep the price low. ........
The suit, filed Friday in Broward Circuit Court, seeks triple damages that would likely reach hundreds of millions of dollars if it is successful, based on financial projections of future profits announced at the time of the Dec. 7 sale.
When Rank Group LLC of London, which is not named as a defendant in the suit, announced the sale of its Hard Rock Cafe International to the Seminoles, both sides hailed the deal as historic. For the first time, an American Indian tribe was expanding boldly into the international financial arena.
But financial analysts quickly questioned the price, with many saying the Rank Group could have made as much as $100 million more. Since the sale was announced, Rank's stock price has fallen almost 15 percent, according to the lawsuit. .......
Cordish, which negotiated the initial Hard Rock and tribe partnership, stands to make at least $1.5 billion over the course of its various agreements with the Seminoles, which run between 10 and 15 years. The tribe's profits are expected to top $17 billion over that period, both sides have said.
But that hasn't translated into a happy relationship. There are three lawsuits, plus countersuits, pending in state and federal courts stemming from the partnership, including one by Donald Trump claiming Cordish Co. and others stole his idea of building a Seminole casino hotel.
The latest lawsuit involves Rank Group's attempts to sell its Hard Rock group and streamline the company, which has significant holdings in the United Kingdom. According to letters and other correspondence attached to the lawsuit, Cordish and Power Plant set out to buy Hard Rock in August 2005, only to be told by Rank executives it wasn't for sale. .....
for the entire article see: http://www.sun-sentinel.com/news/local/southflorida/sfl-sseminole03jan03,0,6467768.story?coll=sfla-news-front