Court lets Marriott protect resources

A judge orders a Waikiki hotel’s owners to give proprietary material to the ousted management

Marriott International, the ousted manager of the former Waikiki Edition hotel, was granted an interim order Thursday allowing it to protect its confidential and proprietary information from the hotel’s owner, M Waikiki LLC.

Bankruptcy Judge Robert Faris ordered M Waikiki to turn over to Marriott or an approved third party all Marriott or Edition confidential and proprietary information starting immediately.

The interim order, which attorneys negotiated largely outside of court on Wednesday and Thursday, will stay in place pending a final hearing, scheduled for Oct. 13.

The hoteliers have been in a power struggle since M Waikiki fired Marriott as property manager during a 2:30 a.m. takeover of the hotel on Aug. 28. The owners said the hotel was losing money, and wanted a new manager. Marriott had 29 years left on a 30-year management contract and said it was successfully building the hotel’s customer base.

M Waikiki renamed the hotel the Modern Honolulu and appointed Modern Management Services, an affiliate of Aqua Hotels & Resorts, to run it.

Marriott countered on Aug. 31 with a court order from a New York judge authorizing them to return to the property as manager. However, M Waikiki filed bankruptcy later that day, effectively thwarting the move.

Under the terms of Thursday’s court order, M Waikiki has agreed to allow Marriott an opportunity to review materials at the hotel. M Waikiki also agreed to bring back any materials that have been removed either physically or electronically since it took possession of the property. Marriott agreed not to disturb operations for the owner and its new management company.

The order says that M Waikiki is not required to relinquish the computers, servers or hardware that it relies on to run the hotel. M Waikiki is also entitled to keep current and future guest reservations, accounts receivable and most accounts payable information, most vendor information, and group and special event bookings.

The order requires that disputed information be stored by Honolulu-based Access Information Management and cannot be accessed unless written agreement is given by both Marriott and M Waikiki or by court order.

It looked like the interim order was not going to come through until late in the day Thursday.

Arguments started outside the courtroom between Alan Feld, a Los Angeles-based attorney for Marriott International, and Dallas-based James P. Muenker, counsel for M Waikiki.

Prior to entering court for a scheduled 10:30 a.m. hearing, Feld crumpled up a copy of a proposed order presented to him by Muenker because the changes were unmarked. The parties then sought and were granted several more hours to meet outside of court, and eventually agreed to the interim order.