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Marriott International, the ousted manager of the former Waikiki Edition hotel, will return to bankruptcy court in Honolulu today seeking an order to protect its confidential and proprietary information from owner M Waikiki LLC.
Bankruptcy Court Judge Robert Faris, who heard first-day motions on Wednesday, continued discussion to 10:30 a.m. today after parties failed to reach agreement.
"I’m reluctant to serve as a settlement judge," Faris said.
This legal battle over what property and intellectual property belongs to Marriott and what belongs to M Waikiki is one of the more controversial disputes in what has become an unparalleled power struggle between Hawaii hoteliers. M Waikiki, made up of about 75 investors, sued Marriott and hotel designer Ian Schrager in May, citing poor performance and mismanagement.
Legal issues heated up on Aug. 31 after M Waikiki dismissed Marriott as property manager during a 2 a.m. raid on the hotel. Owners renamed the hotel, the Modern Honolulu, and appointed Modern Management Services, an affiliate of Aqua Hotels & Resorts, to run the property.
Marriott countered the following Wednesday with a court order from a New York judge authorizing them to return to the property; however, M Waikiki filed bankruptcy, effectively thwarting the move.
"We really are behind where we ought to be in a Chapter 11 case largely because the debtor chose to do what it did 10 days ago," Faris said. "Events are running faster than anyone can keep up with. To be fair, the debtor has to acknowledge that this was a risky decision even if it turns out to be the right decision."
