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Minority Owners Of The Plaza Hotel Sue Majority Owner For Trying To Sell To Third Party

The Plaza Hotel in New York is closed amid the coronavirus.

The minority owners of the Plaza Hotel are suing the property’s main owner, Sahara US Corp., arguing it is blocking their right to buy the building.

Sahara reached an agreement to sell the famed hotel to investors Shahal Khan and the Hakim Organization for $600M earlier this month, Bloomberg reports.

The contract is reportedly due to close in late June. Sahara owns a 70% interest in the landmarked building, while Ashkenazy Acquisition Corp. and Saudi Prince Alwaleed bin Talal's Kingdom Holding Co. own 12.5% each.

In a complaint filed in the New York state court Friday, Ashkenazy and Kingdom allege Sahara has abandoned an agreement that allows them to match another offer. They also allege that Sahara had asked for a second deposit as it shopped the hotel to other bidders.

They claim they cannot seek financing to buy the property because Khan and Hakim are trying to seek acquisition financing with Sahara's blessing. Ashkenazy and Kingdom have asked the judge to force Sahara to sell them the property.

Sahara bought the Plaza in 2012 and has been shopping it since 2015. The company's founder and chairman, Subrata Roy, has been imprisoned for defrauding investors. The price for the hotel, much of which has been converted to condominiums, will come in far below the $1.9B Anbang Insurance paid for the Waldorf Astoria in what many viewed as the jumping-the-shark moment for New York City investment sales.