Opinion ID: 2805465
Heading Depth: 3
Heading Rank: 1

Heading: The Financial Breakdown of the Project

Text: In April of 2012, the Homeowners learned that the developer and its affiliated entities had defaulted on loans encumbering the project.1 As a result, the developer could not pay several months of maintenance and operator fees to Marriott’s management subsidiaries, and it defaulted on its corresponding AOAO assessments. Due to these problems, Marriott decided to abandon the project and to pull its valuable Ritz-Carlton branding. In the course of its departure, Marriott or one of its 1 These facts, drawn from the pleadings, are taken as true for the limited purpose of reviewing Respondents’ motion to compel arbitration. See Douglass v. Pflueger Hawaii, Inc., 110 Hawai#i 520, 524-25, 135 P.3d 129, 13334 (2006). 3  FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER  subsidiaries used its authority as managing agent to withdraw approximately $1,300,000.00 from the AOAO’s operating fund, and threatened to withdraw the remaining $200,000.00 from the fund. AOAO board members, many of whom were employed by Marriott, RitzCarlton, and/or other interested entities, did not attempt to block Marriott from taking these actions. Instead, the AOAO board indicated that the multi-million dollar shortfall would have to be covered by the Homeowners.