Opinion ID: 369386
Heading Depth: 1
Heading Rank: 1

Heading: the adams hotel development

Text: 2 To understand this case, it is necessary to know that the relationship between the parties to this suit began when Vita-Adams Investment Company formed a joint venture, Vita-PIC, with PIC Realty Corporation for the purpose of constructing the Adams Hotel in Phoenix, Arizona. Vita-Adams was one of several interrelated entities constituting the so-called Vita interests. 1 The parent company, The Vita Company, is solely owned by Mr. and Mrs. Albert Spector, each of whom owns 50% Of the stock. (Clerk's Record at 274.) The Vita Company has six wholly owned subsidiaries, five of which are general partners in limited partnerships. Two of these subsidiaries are involved in this case Vita Management Company directly and Vita Development Company as the general partner of the Vita-Adams Investment Company, the co-venturer in Vita-PIC. Vita-Adams' only limited partners are Albert Spector and Albert Spector, Jr. (C.R. 275.) PIC is a wholly owned subsidiary of Prudential Insurance Company. (C.R. 1222.) 3 The Vita-PIC Joint Venture was formed August 28, 1973. Under the joint venture agreement, PIC contributed $5.5 million in equity, Vita-Adams contributed $300,000 in equity and the venture borrowed $12 million. The parties later modified the agreement to increase PIC's equity contribution to $6.8 million and the loan amount to $15.4 million. Under the agreement, Vita-Adams was obligated to pay all costs of constructing and furnishing the hotel in excess of the loan and capital contributions and to cover any operating losses in the first five years. While the hotel was under construction, Vita-PIC entered into a written agreement with Vita Management Company. Vita Management was not obligated to advance any funds for operating the hotel, and all obligations incurred by it in the performance of its duties were on the account of Vita-PIC. 4 By late 1974 a dispute had arisen between the joint venturers. Vita-Adams refused to contribute capital to finish and furnish the building. On November 7, 1974, PIC declared the venture dissolved and began administering its affairs as the liquidating venturer. As such it advanced funds for completion of the hotel. Vita Management became embroiled in the dispute as well. The parties negotiated toward a settlement which was finally reached July 10, 1975. The July 10 settlement agreements terminated the disputes between the parties. Under the terms, the parties released each other from liability, terminated the joint venture, and ended the management agreement with Vita Management. PIC received the title to the hotel. Vita Management entered into a lease for the hotel, received the liquor license and certain assets and liabilities associated with the hotel operation, agreed to complete and furnish the hotel at its own expense and received $1 million from PIC.