Paul Barton obtains multi-million dollar awards against Moody National Companies’ affiliates.

PORTLAND Ore., July 18, 2016 /PRNewswire/ — In separate actions, Arbitrators awarded $2.7 million dollars against Moody National TPS Portland MT, LLC and $1.7 million dollars against Moody National Grapevine MT, LP. Investors purchased the hotels—a 95-room Towneplace Suites hotel located in Scarborough, Maine and a 94-room Hampton Inn & Suites hotel located in Grapevine, Texas—based on securities offerings made by companies owned by Moody National Realty Company, L.P. Upon purchasing the hotels, the owners entered into master leases with Moody National TPS Portland MT and Moody National Grapevine MT. Although the hotels were independently managed, Moody National Management, L.P. eventually assumed management responsibilities. It was under Moody’s management that the hotels failed to generate enough revenue to meet their lease obligations.

Respondents argued that the owners accepted the risks associated with an economic downturn when they purchased the hotels, and that the owners waived their right to back rent by not declaring default during the recession. Both arbitrators disagreed. One arbitrator explained: “No material evidence was produced to establish that the Claimants at any time agreed to forego or forgive any past due rents from the Respondent.” The arbitrators also awarded the owners’ attorneys’ fees and costs.

In addition to the awards,  Rathbone Barton Olsen assisted the owners with selling the hotels, avoided Moody’s undocumented demands for a 3.5% disposition fee, and in the case of the Towneplace hotel, avoided Moody’s demand that the owners pay for the hotel’s outstanding payroll, management, and operating costs.

Brett Moody is the sole shareholder of Moody Management Corporation, the general partner of Moody National Management, L.P., which is the sole member of the tenant entities.

The arbitrations were filed with the American Arbitration Association as TIC TPS Portland 1, LLC v. Moody National TPS Portland MT, LLC, Case No. 01-15-0004-2084, and TIC Grapevine GP 2, LP v. Moody National Grapevine MT, LP, Case No. 01 15 0004 9713.

Coni Rathbone, Paul Barton, and Joe Carlisle represented the owners. Rathbone Barton Olsen represents tenant-in-common owners across the country with loan workouts, refinancing, sales, and litigation.

Please direct questions to Paul Barton at (503) 941-9624.

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