Current Report Filing (8-k)
June 09 2016 - 4:07PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 8, 2016
Morgans Hotel Group Co.
(Exact name of registrant as specified in its charter)
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Delaware
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001-33738
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16-1736884
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(State or other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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475 Tenth Avenue
New York, NY
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10018
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrants telephone number, including area code: (212) 277-4100
Not applicable
(Former
name or former address if changed since last report.)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 8.01. Other Events.
On June 8, 2016, the joint venture in which Morgans Hotel Group Co. (the Company) has a 50% interest in the ownership of the
Mondrian South Beach hotel (Mondrian South Beach), entered into a purchase and sale agreement to sell its interest in Mondrian South Beach. Pursuant to the terms and conditions of the purchase and sale agreement, the buyer paid the joint
venture a cash purchase price sufficient for the joint venture to extinguish its outstanding mortgage and mezzanine loans of $18.7 million and $28.0 million, respectively, plus accrued interest, as of March 31, 2016, in full at a negotiated
discount, and the buyer assumed certain liabilities of Mondrian South Beach. As a result of the debt extinguishment, the Companys operating company, Morgans Group LLC, was released from the condominium purchase guarantee of up to $14.0 million
and the construction completion guarantee. As part of this transaction, on June 8, 2016, Morgans Hotel Group Management LLC and the joint venture mutually terminated their existing management agreement for Mondrian South Beach and the Company
entered into a license agreement with the buyer to allow the hotel to remain under the Mondrian brand. The license agreement grants the buyer a limited, non-exclusive right to use the Mondrian brand and other specified intellectual property of the
Company, subject to certain termination rights, in exchange for a license fee that varies with Mondrian South Beachs monthly gross revenue for the term of the license agreement, but is subject to a minimum annual fee payable to the
Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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MORGANS HOTEL GROUP CO.
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Date: June 9, 2016
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By:
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/s/ Richard Szymanski
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Name: Richard Szymanski
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Title: Chief Financial Officer
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