Milbank represents JD Holdings, L.L.C. (“JD Holdings”) and two of its affiliates in a dispute involving JD Holdings’ right of first refusal on over thirty hotels, and a number of other properties, owned by the John Q. Hammons Trust and its affiliates. The right of first refusal at issue in the case was a main piece of a 2005 transaction in which JD Holdings’ affiliates took private a hotel company founded by hotelier John Q. Hammons. Mr. Hammons, who developed over a hundred hotels during his lifetime, was considered by some to be a legend in the hotel industry.
Mr. Hammons passed away in May 2013, and later that year, his personal representative and the trustees of his trust brought claims in the Delaware Court of Chancery against our clients, seeking to have JD Holdings’ right of first refusal declared invalid under the common law rule against perpetuities, which dates back to the Duke of Norfolk’s Case from 1682. Mr. Hammons’ representatives also claimed that the right of first refusal was an unreasonable restraint on the transfer of the hotels and other properties owned, directly or indirectly by the trust, and for this reason, too, it should be invalidated.
After the parties claims and cross-claims all had been answered, Milbank determined to move for judgment on the pleadings with respect to a number of the parties’ claims, including those seeking a declaration that the right of first refusal did not violate the rule against perpetuities and was not an unreasonable restraint on the transfer of property. Mr. Hammons’ trust and its affiliates cross-moved for judgment, and the parties held oral argument on August 27. In a recent decision, the court agreed that our clients’ right of first refusal was valid, and that it called for Mr. Hammons’ trust and its affiliates to sell all of the properties subject to that right of first refusal by the later of two events, one of which is the second anniversary of Mr. Hammons’ death.
The Milbank team representing JD Holdings and its affiliates consists of Chairman Scott A. Edelman, litigation partner Alan J. Stone, and litigation associates Jed M. Schwartz, Katherine Rhodes Janofsky, and Daniel M. White.
