Adoba Hotel and Royal Realties reach legal agreement

The former management company of the Adoba Hotel Dearborn/Detroit, and its Israel ownership group Royal Realties reached an agreement in a breach of contract case filed by the management company early this year. 

The agreement follows mediation ordered by U.S. District Judge David Lawson at an emergency hearing Oct. 30, following Atmosphere Hospitality Management Services' decision to end its management of the hotel, which operated as the Hyatt Regency Dearborn until two years ago. 

The case was dismissed Nov. 7, without costs to any of the parties.

Virtual Event

Hotel Optimization Part 3 | January 27, 2021

With 2020 behind us and widespread vaccine distribution on the horizon, the second half of the new year is looking up, but for Q1 (and most likely well into Q2) we’re very much still in the thick of what has undeniably been the lowest point of the pandemic. What can you be doing now to power through and set yourself up for a prosperous 2021 and beyond? Join us at Part 3 of Hotel Optimization – A Virtual Event on January 27 from 10am – 1:05pm ET for expert panels focused on getting you back to profitability.

Atmosphere named Royal’s legal counsel and registered agent Ieshula Ishakis and a separate company that also lists him as its registered agent, Mashka, as defendants in the lawsuit.

Terms of the settlement were not released, but Lawson ordered the court will retain jurisdiction in the case for the next year to enforce terms of the settlement agreement between the two sides.

Atmosphere filed the breach of contract case in January after Royal tried to discharge it from its management contract and allegedly thwart its attempts to purchase the hotel. 

Atmosphere voluntarily ended its management of the hotel Oct. 31.

At the Oct. 30 emergency hearing, Lawson approved the transfer of the hotel’s management from Atmosphere to Longview, Texas-based Lodging Host Hotel Corp. as of Nov 1. He also authorized the release of a portion of the more than $1 million the court was holding in escrow from the proceeds of an insurance claim tied to a burst pipe at the hotel last winter.