Viceroy Hotel Group has filed legal claims in California alleging fraud and extortion in relation to its ousting from the management of a $1.17bn hotel in Dubai by Five Holdings.
The claims follow the hotel company’s denial of allegations made in a lawsuit against it last month in Los Angeles by Five (formerly SKAI Holdings) and its CEO Kabir Mulchandani.
This cited a consultant report dated in August that claimed Viceroy “mismanaged” the property, comprising 477 rooms and suites and 221 residences, on Dubai’s Palm Jumeirah.
Viceroy said in the latest announcement its claims seek redress from Mulchandani and entities he controls for damage cause to Viceroy and the Viceroy brand.
“The cross-complaint details Mulchandani’s decision to leverage Viceroy’s hotel management expertise in opening the hotel, which he followed by evicting Viceroy from its role as exclusive hotel manager,” Viceroy said.
“It further details how he subsequently created a false record of accounting-related accusations in an attempt to both justify Viceroy’s eviction after the fact and extort a settlement. The allegations against Mulchandani include fraud, extortion, conversion, and unfair business practices.”
The hotel company went on to cite a June 22 injunction issued by a court in Dubai International Financial Centre against Mulchandani that ruled for restoring Viceroy’s role as hotel manager.
Viceroy claims Mulchandani and the entities he controls have ignored the court order.
Five Holdings announced its purported takeover of the Viceroy Palm Jumeirah on June 19, saying the property had been rebranded Five Palm Jumeirah Dubai.
This led Viceroy to claim the hotel management contract had been breached and the later injunction in the Dubai court.
Five has since stated it continues to manage the property, which opened at the beginning of April.
“Having filed a baseless suit in Los Angeles, Mulchandani and the companies he controls will now be forced to answer for their wrongdoing in Los Angeles and the UAE,” said Viceroy Hotel Group CEO Bill Walshe.