StayWell Hospitality Group is set to launch legal action in New Zealand, following last Friday’s (8 May) termination of five management contracts by the owner of the hotels CP Group.
StayWell Hospitality Group’s CEO and Managing Director, Simon Wan, said his company received notice on Friday 8 May 2015 from companies controlled by CP Group that it has “purported to terminate StayWell Hospitality Group’s management agreements for CP Group’s five trans-tasman properties”.
The two companies established a relationship in October 2013 whereby StayWell took over the management of CP Group’s five trans-Tasman properties.
Wan said while StayWell has elected not to seek an injunction stopping CP Group’s purported termination of the management agreements, it intends instead to commence legal proceedings to seek to recover damages from CP Group.
“We believe that CP Group has failed to meet its obligations under the management agreements and we are pursuing our claims through the legal system in New Zealand to protect our reputation and brand image,” Wan said.
On Wednesday this week (May 13), HM reported CP Group had decided to “take over management of all its smaller hotels and run them in-house effective immediately”.
“CP Group has recently expanded its hotel operational management resources and expertise to operate the smaller hotels it owns, and other smaller hotels it acquires,” the company said.
“The management of CP Group’s five hotels previously managed by Staywell Hospitality Group will join other hotels currently being managed by CP Group.
“All existing management and staff employed by CP Group will continue under their same employment terms and conditions,” CP Group said.