Host Marriott to settle with spinoff challengers

Maryland Watch

March 05, 1996

Bethesda-based Host Marriott Corp. said yesterday that it has reached a settlement agreement with the last of its bondholders who were challenging the 1993 spinoff of Marriott International, Inc.

The lodging real estate company said it will pay PPM America Inc. and several other institutional investors a total of $1.25 million in exchange for the bondholders' withdrawal of their appeal and all claims.

The bondholders, led by PPM, tried unsuccessfully to convince a Baltimore jury in late 1994 that Marriott Corp. had damaged the bondholders in connection with the timing of the spinoff. The plaintiffs sought $18 million in compensatory damages plus punitive damages.

Judge Alexander Harvey entered judgment for Host Marriott on all claims. The bondholders appealed Judge Harvey's decision to the U.S. 4th Circuit Court of Appeals in Richmond, Va., where the case was awaiting decision.

Host Marriott said the settlement upholds the trial court's judgment.

Stephen J. McKenna, Host Marriott's executive vice president, said the company agreed to the settlement to bring the litigation to a close.

Pub Date: 3/05/96

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