Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Hedge Fund's Real Estate Unit Placed into Bankruptcy to Avoid Litigation

Author: Joel R. Glucksman

Date: May 24, 2013

Key Contacts

Back

Hedge fund billionaire John Paulson has placed the real estate unit of his hedge fund into bankruptcy to avoid litigation, including a costly lawsuit brought against it by a lender.

Five Mile Capital Partners recently brought a suit against executives of Paulson’s MSR Hotels & Resorts Inc. – the real estate arm of Paulson & Co. – claiming that it is owed tens of millions of dollars relating to the 2011 asset sales of four bankrupt resorts. The resorts in question are Arizona Biltmore Resort & Spa in Phoenix; the La Quinta Resort & Club PGA West in La Quinta, California; the Grand Wailea Resort Hotel & Spa in Maui, Hawaii, and the Claremont Resort & Spa in Berkeley, California. They were sold to the Government of Singapore Investment Corp. for a total of $1.5 billion.

The lender, which lent MSR $50 million, alleges that the Paulson executives failed to get the best price for trademarks, logos and other intellectual property, according to Reuters. Five Mile’s lawsuit sought damages for breach of fiduciary duty, gross negligence, and corporate waste, the news source added.

In response, MSR is seeking bankruptcy law protection under Chapter 11 of the Bankruptcy Code in a Manhattan courtroom, a move that is intended to prevent litigation against a debtor from going forward. The real estate unit also said it plans to use Chapter 11 proceedings to sell intellectual property relating to the Biltmore, La Quinta, and Grand Wailea resorts, Reuters explained.

Daniel Kamensky, MSR Hotels’ treasurer and partner at a Paulson affiliate, said Five Mile began a “scorched earth assault” on the MSR directors and created complications in what would have otherwise been an “orderly sale and wind-down process,” according to Bloomberg.

“The REIT now seeks to end Five Mile’s continued terrorization of directors that the court has previously found acted in good faith,” said Kamensky.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Scarinci Hollenbeck Expands NYC Real Estate and Litigation Practices ADDING four litigators post image

Scarinci Hollenbeck Expands NYC Real Estate and Litigation Practices ADDING four litigators

NYC Real Estate and Litigation Attorney Ryan O. Miller and Team Join Scarinci Hollenbeck, LLC New York City, NY – August 13, 2025 – Scarinci Hollenbeck, LLC has strengthened its Real Estate and Litigation practices with the addition of four New York City-based attorneys. Ryan Miller, who joins as a partner, is well known for […]

Author: Scarinci Hollenbeck, LLC

Link to post with title - "Scarinci Hollenbeck Expands NYC Real Estate and Litigation Practices ADDING four litigators"
What is Business Law and Why Is it Important? post image

What is Business Law and Why Is it Important?

Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]

Author: Dan Brecher

Link to post with title - "What is Business Law and Why Is it Important?"
Corporate Transactions: Best Practices for Successful Deals post image

Corporate Transactions: Best Practices for Successful Deals

Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]

Author: Dan Brecher

Link to post with title - "Corporate Transactions: Best Practices for Successful Deals"
How to Conduct a Fair and Legal Employee Termination in 2025 post image

How to Conduct a Fair and Legal Employee Termination in 2025

Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]

Author: Angela A. Turiano

Link to post with title - "How to Conduct a Fair and Legal Employee Termination in 2025"
Admin Dissolution for Annual Report: What You Need to Know post image

Admin Dissolution for Annual Report: What You Need to Know

While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]

Author: Dan Brecher

Link to post with title - "Admin Dissolution for Annual Report: What You Need to Know"
What Is Antitrust Litigation Law? post image

What Is Antitrust Litigation Law?

Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]

Author: Robert E. Levy

Link to post with title - "What Is Antitrust Litigation Law?"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. You can reply STOP to opt-out of further messaging.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!