Hotel buyer sues over HK$16m
The purchaser of the Tatami Hampton Hotel, which was forced to close when it was seized by a bank, is suing for the refund of a HK$16 million deposit, after a dispute over the title of the hotel.
With a writ filed in the High Court on Thursday, buyer Year Harvest Investments is seeking refund of its deposit and damages against seller Labour Buildings over an alleged breach of the purchase agreement dated June 6.
Year Harvest claims that Labour Buildings failed to transfer two guest-house licenses before the completion date of the HK$160 million transaction on September 30.
The agreement to buy had come amid a legal battle between Labour Buildings and the Bank of East Asia, which in June gained possession of the Mong Kok hotel because of an unpaid loan of HK$82 million.
The tussle between the bank and Labour Buildings started in 1995 when the company - formerly an investment arm of Taiwan's Kuomintang - applied for a HK$50 million loan.
In January this year, the bank won a claim for repayment of the loan plus interest, adding up to a sum of more than HK$80 million. Labour Buildings appealed, saying there was a potential sale of the hotel. But the court refused to reverse the bank's claim.
Bailiffs moved in on June 18 and more than 100 guests were evicted from the hotel.
It was not until August 14 that Labour Buildings paid the bank HK$103 million to get the hotel released.
The Tatami Hampton Hotel reopened on September 11.
