Ron Burkle threatened Morgans Hotel’s board over proxy fight, lawyers contend

Morgans Hotel Group Co. board members faced threats by billionaire Ron Burkle to harm the hotel chain if they didn’t back his acquisition of several of Morgans’s businesses, a lawyer for one of the company’s directors said. Burkle, whose Yucaipa Cos. is swapping $230 million in notes and preferred stock for ownership of Morgans’s Delano South Beach Hotel in Miami and a restaurant company, “threatened to crater” some of the hotel company’s other deals if directors didn’t accept his buyout bid and offer to backstop a $100 million recapitalization effort, A. Thompson Bayliss, an attorney for a Morgans board member opposing the deal, told a judge today. Burkle also serves on the hotel chain’s board. “What we have here is business terrorism by Mr. Burkle,” Bayliss told Delaware Chancery Court Judge Travis Laster at a hearing in Wilmington today. Jason Taubman Kalisman, a Morgans director and a founding member of its largest shareholder, OTK Associates, sued hi