Hotel management agreement
Startup Indian
(Querist) 15 December 2016
This query is : Resolved
Hi experts
We are startup organisation of hotel professionals who manage the day to day running of hotels from the owners and run the hotel by paying a fixed specific fees to the owner of the hotel.
In order to take over such hotels we are funded by venture capitalists(VC) or any investor who believes in us.
As of now business is good and our investors are satisfied with us.
We also have strong legal paper work in terms of contracts with the owners and the investors through our lawyers defining operational and financial terms.
However dark clouds may descend anytime without our knowledge leading to a dispute between we hotel professionals and the VC's or investors.
Hence my query is that in the event there is a breach in terms of contract the classic litigation will involve around breach of trust etc.
But we personally feel that there could be other unforseen problems in addition to that which we may have over looked.
Therefore we would be very obliged if we can get some direction or advice from you esteemed legal professionals and if found useful or unique engage your services.
Hope you all take it in the right spirit and show us the right direction based on years of experience.
P.S We are not legal guys trying to get some info from you or so.
Thanks
adv.bharat @ PUNE
(Expert) 15 December 2016
You need to take consultancy service from the experienced lawyer.
VC or investment involve trust by public or investor.
Kumar Doab
(Expert) 15 December 2016
Engage very able counsel/law firm.
Show your past agreements and other points that you feel are grey areas.
Your counsels can provide you with drafts as per your needs.
Rajendra K Goyal
(Expert) 15 December 2016
This forum provide guidance in legal matters.
This is management area.
Have services of some consultant.
dr g balakrishnan
(Expert) 15 December 2016
Any business has its own share of problems. so it is obvious 'No single solution is possible by any lawyer' except continuous legal cum management consulting is vital in the case you cited now,
so sirs, i was a corporate consultant that way i provided both services to my client say 300 crores organization for about three decades or so.
my experience, is every single change in parameter might affect the 'apple cart ' of corporate governance, tks
DR.VEDULA GOPINATH
(Expert) 15 December 2016
Dear Start-up Indian entrepreneur
Greetings
Your perception and vision appears to me to be pragmatic and practical thinking.
You are hotel management professionals operating hotels on a sharing basis.
Now you wish to be funded by vC companies and take over the management.
At the outset, I should say that VC company gives you money towards investment for a short term with clear cut terms and well planned exit route.
The hotel owners shall be very happy to agree for the take over the hotels (take over of ownership) at a negotiated price and terms and conditions. You will pay the consideration out of the borrowed funds (VC conribution or loan or equity) who will lend you with clear-cut safeguards and strings.
Sorry for being frank if I say that, you wish to play the management (game) of hotel management with the funds of third parties (VC copanies). If some thing negative happens, OBVIOUSLY VC COMPANIES SHALL BE THE OWNERS OF HOTELS in the ultimate analysis..
Thus to achieve your objective of take over the hotels, you need to have a good legal documents supported by good due diligence procedure coupled with good VC funds borrowing.
Your object should be to effectively run the hotels managed effectively and successfully in such a way that your operations are profitable and successful so that you will discharge liabilities/repayment schedule of VC companies and make profit.
also it is desirable you to take over the ownership of hotels by acquiring majority share and not full control of ownership.
Your proposed invetment shall be mostly funded by VC companies. YOU SHOULD ARRANGE THE TAKE OVER (capital restructure) in such a way that you and your group are majority shareholders (backed by vc companies) while the old majority shareholders (original owners) shall remain effecitvelyt as minority shareholders. Also in the management you should allow them to retain their directorship to take advantage of their establishment culture and background of the organisation. It is the seed that matters for big tree but not the present water and fertiliser to grow it as sowing seed is more important than growing the tree.
Anyway, I shall be happy to guide you further, if you make me available the present set up and your details and understandings without any unwritten deals and understanding. An informed consultant is more useful to you than a half-knowledge consultant who will give only adhoc results.
With all the good wishes to you.
cs Dr Vedula gopinath sr advocate/arbitrator
vgnath@gmail.com mob 9866013121
skype indiancorplawyer
R.K Nanda
(Expert) 16 December 2016
nothing to add more.
Startup Indian
(Querist) 16 December 2016
Thank you very much Sir..Dr. Gopinath.
I just have one final query since you have thrown up a new avenue of worry for us with regards to the owner.
Hence my only query is that as per our contracts with hotel owners in case of a breach of contract then what would be the legal remedies available to us.
Just an outline from your very informed self.
Much obliged
Rajendra K Goyal
(Expert) 16 December 2016
Remedy as per agreement terms through civil court / arbitration if clause exist.
Kumar Doab
(Expert) 16 December 2016
The agreement if drafted properly so as to defend your interest shall be good.
Thereafter the remedy is as suggested by Mr. Goyal.
It is suggested that you should keep good counsels by your side.
Prefer to retain a very able counsel.
dr g balakrishnan
(Expert) 16 December 2016
No agreement is sacrosanct, as every agreement has several clauses countering the other clauses; so it is always some serious conflicts of very clauses themselves, so only the management consultants help, for they are strategists than any promoter of any business; see SBI appointed MacKinseys as their consultants, just because very SBI cannot manage its affairs.see today ATMs do fail to produce right results just because very SBI itself cannot manage its own ATMs is the answer. so your ability is limited so you need consultants.
dr g balakrishnan
(Expert) 16 December 2016
Lawyers are no answer for your query is a fact.
dr g balakrishnan
(Expert) 16 December 2016
Lawyers are only fighters for wrong causes too and they cannot replace consultants mgnagement i mean.
DR.VEDULA GOPINATH
(Expert) 17 December 2016
Greetings to the forum
1. To Start-up entrepreneur
Let me see the agreement with your hotel owners before giving my considered opinion.
2. Learned respected colleague Dr G.Balakrishna
wish to add...Lawyers are also equally responsible for preventing of FIGHT and to ensure our client is on the right side of law.
We take pride from our great seniors and forefathers Rev.Nehru family, Great Mahatma, Past USA Presidents.(who are advocate turned world leaders).
cs Dr Vedula Gopinath, advocate/arbitrator
vgnath@gmail.com skype indiancorplawyer
Guest
(Expert) 17 December 2016
One Who boast Most Would Fail Most Because DEEDS ARE SILENT
Startup Indian
(Querist) 17 December 2016
Hi Again
I was told by a friend who is a legal professional the concept of "Quantum of merit".
My humble request to experts is that can this concept be applied in a contract that we are using.
If so then how and when can it be used or enforced legally.
DR.VEDULA GOPINATH
(Expert) 18 December 2016
Dear Startup Indian
There have been many concepts and schools of thoughts founded by great people basing on equity principles. You have mentioned one concept of QUANTUM MERUIT (not quantum merit as mentioned by you). This means AS YOU DESERVE or AS YOU EARN .This concept would arise at the type of division of profits among others. After all Contract Law is emanated from British apart other sources and recognitions and acceptances.. Most of the concepts are not in English and French and Latin words find a place in English as well as Indian law.
Your request for remedies can be handled only after examining the actual contract and not on hypothetical or illusory inputs.
I fail to understand the comment of my learned colleague/expert Mr.NJSR Rajkumar as it appears to me to be inappropriate.
good wishes
sincerely
Dr Vedula Gopinath advocate/arbitrator
Kumar Doab
(Expert) 18 December 2016
This is a thread in which the author/querist is clear and pursuing his query and experts that are discussing are gentle, and posting points that are new dimensions..................to enrich.
Hope to gain more from experts.
