Cheeca Holdings Wins Arbitration Regarding Management Contract

ISLAMORADA, FL— Cheeca Holdings LLC, owners of the newly renovated Cheeca Lodge in the Florida Keys, announced that the arbitration proceeding with RockResorts Inc., the hotel’s former management company, was decided Friday. The Cheeca Lodge terminated its contract with RockResorts in March of 2006 and remains independently owned and operated. In the arbitration, the arbitrator ratified and confirmed Cheeca’s legal and/or contractual right to terminate the remaining 27 years of the hotel management agreement, although RockResorts would be due some compensation for having the agreement terminated before such time. The arbitrator noted that it is a common industry practice for hotel management agreements to be terminated prior to the full term of the contract. Thus, this award reflects a discounted price that Cheeca must pay to be unencumbered of the long-term management agreement with RockResorts, which the arbitrator described as having been plagued with “shortfalls” in its performance.