Emergency appeal filed to stop Galt House sale - WDRB 41 Louisville News

Emergency appeal filed to stop Galt House sale

Posted: Updated:

LOUISVILLE, Ky. (WDRB) – Two daughters of the late developer Al J. Schneider have filed an emergency request with the Kentucky Court of Appeals to halt the sale of the Galt House hotel to Columbia Sussex Corp., which they believe will happen by Friday.

Christe Coe and Nancy O’Hearn say in court papers that the trustees who control the Al J. Schneider Co. and its assets are determined to sell the “iconic” riverfront hotel before May 31, when control of the Schneider trust shifts to the late developer’s 21 living children and grandchildren, 15 of whom oppose the sale.

“What they are trying to do is cram down the sale of this property in the face of an overwhelming mandate from the beneficiaries,” said Mark Grundy, a lawyer for Coe and O’Hearn, at a Jefferson Circuit Court hearing Monday. “If they wanted to sell this property, they have had years to do it. This is an iconic hotel. It is the namesake of this family. It is the family legacy.”

UPDATE, 4:45 pm: But in a court filing Tuesday, trustees who control the Schneider Co. said there will be no sale of assets, including the Galt House, on or before April 1.

"No closing on a transaction has ever been planned for that date," according to the filing, which adds that the Coe group is trying to "scare off any buyer of any asset" of the Al J. Schneider Co.

The appeal is the latest turn in the increasingly tense family feud – one that pits Schneider Co. CEO Mary Moseley and her sister, Dawn Hitron, against their sisters Coe and O’Hearn.  

Court records which were previously sealed from the public reveal that last August, the Schneider Co. approved a “plan of liquidation” that contemplates selling “substantially all” of the company’s real estate for minimum prices that total $228 million.

For the Galt House – both the East and West towers – the Schneider Co. set a minimum price of $125 million. The company also put up for sale its Riverfront Plaza and Waterfront Plaza office buildings; its 40 percent interest in the new downtown Embassy Suites Hotel; and the Crowne Plaza hotel at the airport:

Newly available court records also confirm that the beneficiaries who oppose the Galt House sale think the buyer is Columbia Sussex, a Northern Kentucky company that manages chain-brand hotels.

Columbia Sussex, though an affiliate company, placed a legal ad in February indicating its intention to apply for liquor licenses at the Galt House, a move that signaled it would soon acquire the 1,300-room hotel, which is the biggest in downtown Louisville.

Neither Moseley nor her attorneys have confirmed that Columbia Sussex is the prospective buyer, though they say in court papers that the transaction is valued at $135 million.

Gregg Hovious, one of Moseley’s attorneys, said Monday that the sale is “moving forward,” though he would not elaborate. 

While the Schneider Co.’s interest in the Kentucky Kingdom amusement park is not mentioned in the plan of liquidation, an attorney for Coe and O’Hearn said in court Monday that the amusement park stake is also up for sale.

“We are talking about a company that is going to vanish,” said Benjamin Lewis, one of 10 lawyers who attended a hearing before Circuit Judge Mary Shaw on Monday.

Among a number of requests, the Coe and O’Hearn group has asked Shaw to reconsider her ruling last week to lift a temporary restraining order that had prevented the sale of the Galt House.

Attorney Rebecca Jennings told Shaw that it’s “very disingenuous” to say her clients -- Moseley, Hitron and their like-minded co-trustees Michael B. Mountjoy and R. Joseph Mittel – have rushed the sale of the Galt House on the eve the trust’s expiration.

In fact, the Schneider Co. has been contemplating liquidating its assets, because of market conditions, since December 2014, she said.

“Now a shadow has sort of been cast over what they are doing here,” Jennings said in court Monday.

While the 21 Schneider beneficiaries still stand to pocket any proceeds from the Galt House and other asset sales, only three of them have any control over the decisions of the Schneider Co. until May 31.

That’s because Schneider placed all of the voting shares of the Schneider Co. in a trust for 15 years following his death in 2001. The trust is controlled by five trustees – four of whom (Moseley, Hitron, Mountjoy and Mittel) favor the asset sales, while the other trustee Coe is opposed.

The Moseley group says Schneider gave broad powers to the trustees – including the power to sell the company’s assets.

Below are copies of the Schneider Co.'s August, 17, 2015 plan of liquidation and a Jan. 7 letter of opposition from beneficiaries opposed to the Galt House sale:

Copyright 2016 WDRB News. All rights reserved.

  • Sign Up for WDRB's Sports Newsletter

    * denotes required fields

    Thank you for signing up! You will receive a confirmation email shortly.
Powered by Frankly
All content © Copyright 2000 - 2018 WDRB. All Rights Reserved. For more information on this site, please read our Privacy Policy, and Terms of Service, and Ad Choices.