Hilton escalates legal battle against former Jerusalem Waldorf Astoria owner over $26 million unpaid debt
Hilton escalates legal battle against former Jerusalem Waldorf Astoria owner over $26 million unpaid debt
Two previous arbitration rulings regarding the dispute between Michel Ohayon and Hilton were made in London by the International Chamber of Commerce (ICC). Hilton is seeking for the arbitration rulings to be enforced against Ohayon in Israel as well
A bitter legal dispute has emerged between the Hilton Hotel chain and Michel Ohayon, the French-Jewish businessman and former owner of the Waldorf Astoria Hotel in Jerusalem. The Jerusalem District Court has imposed a temporary injunction on Ohayon's properties in Jerusalem amounting to NIS 99 million ($26.8 million) at the request of Hilton Worldwide, who claimed that Ohayon was in violation of a previous ruling.
Two previous arbitration rulings regarding the dispute between Ohayon and Hilton were made in London by the International Chamber of Commerce (ICC). Hilton is seeking for the arbitration rulings to be enforced against Ohayon in Israel as well. He can either fight their suit or file a request to dismiss the injunctions.
The Hilton Hotel chain has previously operated the Waldorf Astoria complex, which was bought by Ohayon in 2017 from the Canadian Reichmann family for $160 million. Ohayon signed personal guarantees promising to abide by Hilton’s existing agreements, including management of the hotel by Hilton Worldwide and the granting of a loan and a license for Ohayon to use the hotel's name. Hilton says that Ohayon has failed to comply with the terms of the loan and hasn’t paid the license fees for using the hotel's name. Hilton has demanded immediate repayment of the debts.
Following the initial arbitration between the two parties in London, Ohayon was ordered to pay Hilton $18.5 million - $2 million for the license fees and $16.5 million for the loan and other key fees. In late 2022, Ohayon was then ordered to pay an additional $3 million in interest on the loans and about $1.5 million for legal fees and arbitration costs. In total, Ohayon was ordered to pay NIS 99 million ($26.8 million).
Hilton attempted to collect the debt in France, where it obtained enforcement of the arbitration ruling in court, but it was unsuccessful. Hilton claimed that Ohayon owned properties in Israel and therefore filed a request to enforce the arbitration ruling in Israel and impose injunctions on his properties. Hilton requested that the injunction be one-sided to prevent Ohayon from moving assets out of the country. "Ohayon has not paid a single penny of the large sums determined in the arbitration," Hilton said in its petition to the Jerusalem District Court, which eventually approved the injunction on Ohayon's properties.
The Waldorf Astoria Hotel, with 226 rooms and ten floors, is located at the corner of Agron and King David streets in Jerusalem and is considered one of the most luxurious hotels in the city. The hotel was built on the foundations of the historic Palace Hotel, built in 1929 by the Mufti of Jerusalem, Hajj Amin al-Husseini.
The Reichmann family purchased the building in 2006 for $20 million and built the new hotel, which opened in 2014 after an investment of $150 million. The family sold the hotel to Ohayon only after the Israel Money Laundering and Terror Financing Prohibition Authority (IMPA) examined the funds that Ohayon transferred from Europe.
Ohayon lost control of the hotel in 2020 after his loan from investment fund York Capital Management, managed in Israel by Jeremy Blank, defaulted. York's legal proceedings against Ohayon took place in a Luxemburg court.
First published: 12:46, 02.04.24
