Marriott to delay restructuring until early June

January 29, 1993|By Ian Johnson | Ian Johnson,Staff Writer Bloomberg Business News contributed to this article.

NEW YORK -- The Marriott Corp. said it would delay the company's controversial restructuring plan after bondholders agreed to a two-week delay in a court hearing scheduled in a suit aimed at blocking the plan.

The two-week delay in the hearing, which now will take place Feb. 11, would result in an accompanying two-week delay in the company's restructuring plan, Marriott spokesman Terry Souers said.

Unless the court prohibits it from going through, the company would be restructured in early June instead of mid-May, Mr. Souers said.

Marriott, which sought to block bondholders' attempts to obtain documents and carry out depositions, has also withdrawn its objection, allowing the case to continue, said Andrew Rahl, who is one of several attorneys representing the bondholders.

"It is significant because we can carry on with the litigation," Mr. Rahl said.

The restructuring opposed by the bondholders would split the company into two companies: Marriott International Inc., which would encompass its profitable lodging, food and facilities management and be debt-free; and Host Marriott Corp., which would own the less-profitable real estate and concessions operations -- and $2.9 billion of Marriott debt.

The bondholder group, led by PPM America Inc., owns about $100 million in Marriott bonds. It filed suit against the company and three top officers alleging securities fraud. Their suit claims Marriott failed to disclose its restructuring plans when it sold $400 million in bonds in April and May.

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